Messaging app Telegram is expecting to collect a jaw-dropping $1.6bn from investors before its initial coin offering (ICO) even starts.

Telegram is said to be running a second pre-sale (the first pre-ICO round raised $850m from a bunch of Silicon Valley heavyweight investors), and it's looking to gather the same again, according to reports this morning.

Last year saw a stampede of blockchain startup companies executing token sales. These 'events' are often structured in such a way that only high net worth investors, and cryptocurrency insiders holding very large amounts of coins, are privy to the sale. This approach is to appease US regulators, the Securities and Exchange Commission.

Telegram has opted to allow accredited investors only to participate (known as a Reg-D exemption in SEC parlance), and has imposed a further hierarchical order in the form of its secret, invite only pre-sales.

ICO's in general have earned crypto something of a bad name in past year. The Chinese have banned them outright and US regulators recently stated that every token sold in the US so far would count as a security and therefore fall within regulatory jurisdiction.

Telegram wants to use the funds to build a new platform called the Telegram Open Network (TON) and incentivize its users with a cryptocurrency. A white paper circulated to investors and leaked onto the web last year, outlines a range of 'Web 3.0' decentralized services including decentralized file storage, domain name services and messaging, obviously.

A token certainly provides a neat way to accomplish decentralized services on a platform. Telegram is also touting a proof of stake approach, sharding to scale the blockchain and so on. Experts have commented that it's rather thin on technical detail and reads like a bricolage of other blockchain white papers out there.

While Telegram's ICO dwarfs all the others so far, it should be noted that there are a growing number of well-funded decentralized infrastructure projects out there (see Blockstack, Sia and Filecoin/IPFS) which have all issued multiple, peer-reviewed technical white papers.

Telegram's hype is stems from the fact it has a 200 million user reach, say experts, rather than on the technical merit of its plans for a crypto-economically functioning ecosystem.