Telegram Open Network (TON) developers responded to its investors after American regulators abruptly announced that its $1.7 billion token sales were illegal.
According to a TON letter to investors, the firm has been trying to solicit feedback from the United States Securities and Exchange Commission (SEC) for the past 18 months regarding the TON blockchain and does not agree with the recent action.
It wrote:
“We were surprised and disappointed that the SEC chose to file the lawsuit under these circumstances, and we disagree with the SEC’s legal position.”
In the letter, Telegram stated that they are continuing to evaluate the best ways to resolve the situation in the interests of relevant parties, including but not limited to evaluating whether to delay the launch date.
After assessing Telegram’s initial coin offering (ICO) as illegal, the SEC also filed a temporary restraining order, setting a court hearing in New York for October 24.
Following the news, Nathaniel Popper, the tech reporter of the New York Times, has tweeted on October 12, pointing out the involvement of high-profile investors in Telegram’s $1.7 billion ICO, including Benchmark, Sequoia, and Lightspeed.
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Nathaniel Popper
He wrote:
“The SEC’s move to shut down Telegram’s crypto project raises questions about the big venture capital firms that gave it $1.7 billion and convinced themselves that it would pass regulatory muster. That includes Benchmark, Sequoia, and Lightspeed.” Nathaniel Popper
The SEC's move to shut down Telegram's crypto project raises questions about the big venture capital firms that gave it $1.7 billion and convinced themselves that it would pass regulatory muster. That includes Benchmark, Sequoia and Lightspeed. — Nathaniel Popper (@nathanielpopper) October 11, 2019
It has been reported that a private Telegram channel for TON investors removed all previous posts and announced it will be taking a break amid the increased level of regulatory uncertainty.
However, the SEC has been notably criticized for its lack of clarity regarding cryptocurrencies and ICOs. In late September, a group of lawmakers from the U.S. Congress sent a letter to Jay Clayton, the authority’s Chairman, urging the commission to issue clear guidance on cryptocurrencies.
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Previously, Warren Davidson, the Representative, hosted a crypto roundtable where participants expressed their concerns over the existing legal framework for ICOs and crypto.
Earlier this year, John Berlau, a Senior Member at Libertarian, think that Competitive Enterprise Institute criticized the SEC’s approach for regulating cryptocurrencies, arguing that its “burdensome regulation” kills transformative innovation. He also argued that the SEC’s scrutiny could threaten the functionality of blockchain tech if the agency treats cryptocurrencies as securities.
In early April, U.S. lawmakers reintroduced the Token Taxonomy Act that aims to exclude crypto from securities laws.
Source: scribd.com
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