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Telegram Is Selling Fake Telephone Numbers for Crypto

The encrypted messaging app had already been taking and pawning off popular usernames, but this would allow users to access the platform without a SIM card.

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A phone with the telegram app icon surrounded by 100 dollar bills.
Telegram has facilitated the sale of over $50 million worth of usernames in crypto auctions, and now it wants to auction off fake phone numbers to allow access to the platform.
Photo: Mehaniq (Shutterstock)

Telegram is not yet done finding new ways to monetize access to its platform. On Tuesday, the encrypted messaging app announced users will be able to sign up for its services without needing access to a SIM card. How, you may ask? By buying up a phone number with crypto, of course.

In a blog post, Telegram said it was making it possible to access the app by “using blockchain-powered anonymous numbers” that it was now auctioning off for crypto on the company’s own Fragment crypto platform. Though users could access Telegram with an encrypted phone number, it now gives the app’s users a way to do it even more anonymously, as long as they’re willing to open up their crypto wallets.

It should be noted that the Fragment marketplace isn’t available in the U.S. After connecting to the service with a VPN, it showed some numbers were going for just under $40 with six days left to bid, while other numbers, such as 888-8-888, were selling upwards of $61,850 with two weeks still left on the bidding process. The thing is, you can’t use those numbers for anything other than signing up for Telegram, which makes the idea of an “auction” even more bonkers.

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Some fake anonymous numbers were being sold for ridiculous amounts considering they only have a use of helping users sign up for Telegram.
Some fake anonymous numbers were being sold for ridiculous amounts considering they only have a use of helping users sign up for Telegram.
Screenshot: Fragment

Telegram has been aggressively monetizing its platform over the past year to make more money off its 700 million global active users. On Tuesday, Telegram CEO Pavel Durov said on his official channel that his company has over 1 million people paying for Telegram Premium, which was released just five months ago, though premium subscribers only represents “a fraction” of their overall revenue.

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Fragment is also where Telegram has been selling off popular usernames for an extra bit of crypto cash. It seems Telegram and its new expressed love for crypto doesn’t mesh well with U.S. regulators, as has been evident in the past.

Back in October, Telegram started auctioning off popular usernames on the TON blockchain, which had originally been developed by Telegram before splitting off after the Securities and Exchange Commission started investigating the company for selling unregistered securities.

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But things didn’t go off without a hitch. In August, Durov told users that the company had nicked addresses from users who had been “empty or inactive in the past year.” The CEO promised “99%” of those addresses would be reintroduced to the public, while only 1% would go up for auction. Before the release of its username auction house the company had reportedly started repossessing some popular names without first notifying those users. As noted in a post by Molly White of Web3isGoingGreat, the relatively minor Twitch content creator UmbyUmbreon tweeted back in November that their username @umbyvids and @umbydotdog were being put up for auction without their consent.

Remi Vaughn, a Telegram spokesperson told Gizmodo in an email that the company investigated usernames to see whether they’ve been active in recent months or used as a static placeholder to redirect users before deciding to repossess them. “No system can perfectly distinguish between a channel being used to squat a username and one of these static placeholder or redirect channels,” Vaughn said.

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The names in question were then sometimes resold as expensive NFTs on Fragment. The most expensive kinds of names like “Facebook” were sold for $94,200 while “Amazon” went for $425,000, all in TON coin. Currently, the username “@coin” is going for $585,900, which you can expect will be very handy for anybody trying to drag naive Telegram users into any number of untested and potentially scam-filled crypto adventures.

It’s unclear if the company was responding to some of the backlash, but last month Telegram announced it would allow its users to list their own usernames on Fragment for free without putting up a starting bid. Once any person puts down a bid, it starts a 7-day eBay-style auction, where the platform takes a fee from the proceeds.

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Durov is a Russian-born millionaire and self-proclaimed libertarian, so it makes sense why he would be so into crypto. On Nov. 30, the CEO claimed on his page that Fragment had already sold $50 million worth of usernames in less than a month. He said he has aims to add crypto wallets and “decentralized” crypto exchanges onto the Fragment platform, apparently ignoring what happened last time when his company was smacked upside the head by the SEC. Even though the crypto world has been rocked by the corruption being detailed by the implosion of crypto exchange FTX, Durov publicly exclaimed the merits of “decentralization” in crypto and how blockchain technology “should be finally able to deliver on its core mission - giving the power back to the people.”

Updated 12/9/2022 at 11:30 a.m. ET: This story has been updated with additional comments from a Telegram spokesperson regarding the repossession of usernames.