The messenger app Telegram on Friday announced that it has hit 400 million unique monthly users—with at least 1.5 million new people signing up to the platform every day.
But due to an ongoing court case with the SEC, those 400 million users won’t have direct access to the upcoming blockchain network, the Telegram Open Network.
The blockchain network was supposed to monetize Telegram’s hundreds of millions of users. Currently, Telegram doesn’t run ads and relies on the reserves of its billionaire founders, Pavel and Nikolai Durov, who made their fortune from setting up the Russian version of Facebook, VK.
That money is running out—maintaining a blockchain network for 400 million users is frightfully expensive—and the team had pegged their hopes on TON. The blockchain was designed to be a faster blockchain platform than Ethereum.
But TON has faced non-stop regulatory troubles and was hit with yet another temporary injunction in March. The latest injunction came after the US Securities and Exchange Commission said Telegram’s $1.7 billion token sale for TON was illegal. It has been arguing this since October 2019, effectively preventing the network from launching.
Next week, Telegram might have to start returning that money to investors due to a peculiarity of the purchasing agreement for GRAMS. This states that the network must launch by April 30; if not, investors are entitled to a refund.
From strength to strength
Up by 100 million users in the past year, Telegram is now the most downloaded social media application in over 20 countries.
“When we started Telegram 7 years ago, we assumed that people will always choose freedom and quality over restrictions and mediocrity,” the platform said in a statement. “Thank you for being smart and free!”
The cloud-based service, which was created by Russian developers in 2013, also said it is working on making group video calls secure this year.
Highly encrypted and fast, Telegram is a more private way of sending instant messages than WhatsApp, though it still lags far behind the Facebook-owned platform, which boasts over 2 billion users.
Its value is even being acknowledged by the Russian government—who are thinking about overturning their ban on the service as they see its usefulness in spreading vital information about COVID-19.
Whether a leader in the blockchain business or not, Telegram’s privacy-first direction is clearly popular. But without a sustainable business model, how long can Telegram stay afloat?