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Cloud-based instant messaging and voice over IP service Telegram is embroiled in a $1.7 billion legal battle due to its token offering.
The Supreme Court has sided with the Securities and Exchange Commission (SEC) and ordered Telegram to halt its token offering. Blockchain Association is hopeful that this case will help the crypto space.
“I think the outcome of this case can help put pressure on Congress to step in a write a new law that would provide a path forward,” Kristin Smith, executive director of the association, told CoinDesk in an interview.
“We really hope that instead of getting clarity through the court decisions, the SEC through the rulemaking process, or Congress through legislation, will provide a really clear pathway for such projects to be developed and launched.”
However, this might still take time due to the COVID-19 lockdown. Smith is hopeful that the ongoing battle involving Telegram will give lawmakers an appetite to find ways to support innovations and growing industries and hopefully this will result in positive legislation.
“When there are national and international challenges like the coronavirus, it’s ultimately the innovation that helps get the economy out of the crisis and moving again,” Smith added.
Blockchain Association is an advocate for blockchain and cryptocurrencies. The organization felt that the Supreme Court’s decision against Telegram was a blow to the entire blockchain industry. The association chose to support the software company.
“Two steps are legally and temporally distinct. Indeed, the tokens did not even exist at the time of the private placement,” the association said in defense of Telegram.
“Treating the two steps as one defeats the purpose of the [SEC’s] private-placement rules. Telegram gathered investments in a private placement with a proper Regulation D filling yet the district court has barred Telegram from delivering the fruits of that investment and, even from finishing the harvest.”
