The result of Telegram’s ongoing court battle over its 1.7 billion token offering can bear no positive output to the company but it can push Congress to step in enforcing a new law and thus cryptocurrency regulation can be further bolstered.
Claiming the issuance of tokens by Telegram as unregistered securities, the Securities and Exchange Commission wants bring an end to the case. It is expected that with the decision of the court, a clear pathway for such projects will come out to be developed and launched.
The time of the decision will take time as the current pandemic has made everything locked down but hopefully we will see a positive legislative because there is appetite among lawmakers to find ways to back innovation and growing industries. This innovation can help the entire world run normally in any untoward condition or collapse like the existing coronavirus pandemic.
The Blockchain Association, an association of industry leaders advocating for the innovation and collaboration necessary to support American leadership of the industry, has been as an ally of Telegram and on part of Telegram, the association asked the court to dismiss the allegation of SEC. The association has been weighing in heavily on the legal fight between Telegram and the SEC. But Judge Castel didn’t follow the reasoning that while the SAFT arrangement was a security offering, the tokens Telegram promised to investors are not and the judge issued a preliminary injunction blocking the issuance even for investors outside the U.S. got highly appreciated by SEC who asked court to halt the issuance of Telegram’s blockchain tokens.
Another opinion comes that on the off chance grams are actually securities, with the approval of SEC they can be traded on and investors can hold them for a certain period of time and sell them to private investors and private exchanges overseas too. However it’s precarious for companies that have already issued SAFTs and it really restrains many new projects from even launching.
What will be the future of SAFT?
SAFT, simple agreement for future tokens, was introduced in 2017 for selling tokens to institutional investors and the framework have neither endorsed nor rejected by SEC. According to SEC’s belief SAFT framework is not a safe way for fundraising. Benjamin Beaton, partner at Squire Patton Boggs law firm, believes the industry has good reasons to trust the framework. And so he thinks the SEC’s enforcement action against Telegram seems unfair. He also believes the verdict is not coming in favor of Telegram but it doesn’t mean SAFTs are taking a halt.