Telegram’s ongoing court battle over its $1.7 billion token offering could help move cryptocurrency regulation forward, according to the Blockchain Association.
While unfortunate for Telegram, “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.
The Securities and Exchange Commission (SEC) wants to halt the issuance of tokens for Telegram’s blockchain project TON because, the regulator claims, they are unregistered securities.
“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,” she added.
That won’t happen right now, when everybody’s looking for ways to get past the COVID-19 pandemic. Later, however, “there will be an appetite among lawmakers to find ways to support innovations and growing industries as we get to the recovery, and I think we’ll see some positive legislation when that happens,” Smith said.
“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,” she added.
The Blockchain Association – a crypto industry advocacy group with members including Coinbase, Circle, Digital Currency Group, eToro, Anchorage, Kraken, Ripple and others – has been weighing in heavily on the legal fight between Telegram and the SEC.
The SEC asked the court in October to halt the issuance of Telegram’s blockchain tokens, called grams, to the investors in its private token sale. The commission recently scored a win when Judge Kevin Castel of the U.S. District Court for the Southern District of New York issued a preliminary injunction blocking the issuance, even for investors outside the…