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No it didn't.

It is and always wanted to be a secure messenger which does not share your data with some big company.

Providing an insecure feature within the app was stupid. People didn't even realize that this was an issue, and those who ran away now never even cared about the core features of Signal. They just wanted to have another SMS client.

https://www.signal.org/blog/sms-removal-android/

It actually started as an encrypted messenger on top of SMS, TextSecure. From that perspective the inclusion of SMS made a lot of sense.

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