Recently the Securities and Exchange Commission (SEC) obliterated Telegram’s $1.7 billion GRAMS initial coin offering (ICO). Literally, this was one of the biggest ICOs in history, and the SEC completely destroyed the project just because investors from the United States participated. 

SEC Commissioner Hester Peirce, who is known to be an avid crypto supporter, believes that the SEC’s actions were wrong. Basically, Peirce says that clear rules should be put in place for crypto companies to follow, rather than the current situation where the SEC has vague rules and is attacking every ICO with enforcement actions. 

Zooming out, the ICO sector used to be the most promising facet of the crypto space, but a string of scams and failures led to strict SEC enforcement action. 

However, the SEC was supposed to create guidelines for crypto ICOs, and was supposed to theoretically allow legitimate ICOs. Instead, the SEC has effectively banned all ICOs. 

In the case of Telegram, it is a very legitimate company, and the Telegram Open Network (TON) blockchain and the GRAMS token likely would have been successful. Considering that, the SEC should have worked with Telegram, instead of doing everything they could to destroy the project. 

As Peirce says, the SEC’s actions against Telegram ultimately didn’t protect anyone, and this incident will just force crypto projects and innovators overseas “Who did we protect by bringing this action? The initial purchasers, who were accredited investors? The members of the public, many of whom are outside the United States, who would have bought the Grams and used them to buy and sell goods and services on the TON Blockchain? Did they really look to U.S. securities laws for protection? Would-be innovators, who will now take additional steps to avoid the United States?”

Further, Peirce notes that the SEC is overstepping its boundaries by shutting down the Telegram ICO, since the Telegram ICO was based in Russia, not the United States. 

Ultimately, the SEC is not doing its job, and the crypto space is being inhibited for no good reason by SEC actions. What the SEC should do is release clear guidelines for launching a crypto ICO, and strike a balance between protecting investors and leaving the door open for crypto innovation in the United States, instead of completely blocking all crypto innovation.