Altcoins Crypto ICO

Telegram Copycat Company Exposed as Fraud

Rick D. | April 11, 2018 | 11:49 pm
Altcoins

Telegram Copycat Company Exposed as Fraud

Rick D. | April 11, 2018 | 11:49 pm

Someone has registered a company in the UK that has plagiarised the global instant messaging app Telegram’s ICO project name. According to reports in Quartz, the Telegram Open Network Limited was incorporated in late February.

UK Company Listing an Obvious Fraud

According to documents from Companies House, the UK company register, Telegram Open Network Limited was registered under the name of the real instant messaging application’s founder, Pavel Durov. He is listed as the UK Limited company’s sole shareholder, director, and secretary.

Several Twitter users speculated about whether the new company listing was anything to do with the real Telegram app. Their intrigue was eventually responded to by the official account of the messaging service:

However, even before the official response on the matter, doubt was raised over the legitimacy of the newly registered company for several reasons. Firstly, the listing states that Durov is a British citizen and that the company’s base is in the UK. In fact, the Telegram founder is actually a citizen of St. Kitts and Nevis. The Russian-born entrepreneur was given citizenship there are donating a quarter of a million dollars to the nation’s sugar industry.

The second red flag is the paid-up capital listing the suspicious Limited company registered with Companies House. According to Quartz, a potential investor in the Telegram ICO stated that pouring the £800 million listed into a UK-based company would be foolish due to the enormous tax obligations they’d face. The unnamed investor stated:

“It’s a scam of some sort.” 

Confusingly, Telegram’s actual crypto project is called the Telegram Open Network too. It has raised over $1.7 billion in funding so far.

The real Telegram is a hugely popular instant messaging, chat application. It currently serves over 200 million active users every month. The platform recently launched an initial coin offering too. The funds generated by the token sale are to be used to for a number of developments. These include a file storage system.

Interestingly, it wouldn’t be at all difficult to create such a fraudulent listing at Companies House. The process involves a tiny administration fee of just £12 and is self-certified by the applicant themselves. In fact, back in 2012, there were a total of 528 fake companies reported to the authorities. More recent figures are not freely available.

As easy as it is to register a company in such a way, it remains unclear as to why someone would bother. There seems to be little to gain. One potential reason stated by a UK non-profit organisation called the Fraud Advisory Panel is that fraudulent listing might be made to give the impression of solid finances. However, with a company offering a product as popular as Telegram which is performing so well raising money via ICO, it still seems a curious move.

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