I never did SSL from telnet for sure, in fact I didn't know IRC supported encryption back then. There was also the ident response that was needed - can't recall the particulars as it's been 20+ years.
I was talking end of 90s. UnrealIRCd (mainly Carsten Munk / stskeeps) was one of the first to support TLS/SSL. At some point in start of 00s the popular IRC networks slowly but surely started to support it. There's also the case for cryptography between servers, something UnrealIRCd also was quick to adapt.
Some servers required ident(d) response which required a server running on privileged port 113.
The one issue for the longest time was that networks would use self signed certs and often different certs per server in the network, so it was hard to have any kind of trust. I did see a few using Let's Encrypt in recent years but moved over to Matrix these days
