Court Orders Telegram to Provide SEC With Bank Records


Telegram will release bank records that the SEC believes will prove misconduct in the $1.7 billion offering of Gram tokens. 

January 14, 2020, | AtoZ Markets –  Telegram ordered by Southern New York District Judge, Kevin Castel, to provide all relevant financial information from its GRAM token sale including all banking records. The firm will have until February 26 to provide the court with the bank records.

SEC aims to prove traces of Telegram misconduct in raising the $1.7bln

The judge had previously blocked the Securities Exchange Commission (SEC) from accessing all the documents setting a scope of financial records accessible to the US securities regulator on request by Telegram’s lawyers who argued against breach of privacy laws for their international based customers.

According to the court ruling released on Monday, January 13, the messaging app company will be required to provide bank records to SEC, who aim to prove traces of misconduct in raising the $1.7 billion ICO last year. The courts will receive a redacted version of the financial records in accordance with the international privacy laws. The court ruling reads,

“Only redactions necessitated by foreign privacy laws shall be permitted and a log stating the basis for any redaction shall be produced at the time the redacted documents are produced. Defendants shall produce the bank records on a rolling basis and shall complete production by February 26, 2020.”

Court will not extend the deadline to produce the bank records

There have been several extensions on the deadline for the supposed release of the bank details. However, the court stated it will not extend the deadline to produce the financial records past February 26.

Telegram’s request for additional five-to-seven weeks has been accepted. Nevertheless, the disclosure of full records to the SEC may come as a blow to its cryptocurrency project. This may further delay the launch of the TON blockchain.

Earlier in the year, the SEC filed for a motion for Telegram to produce records on how it spent its $1.7 billion USD raised from the ICO sale of GRAM tokens. The initial request was, however, denied by the Southern District of New York. This restriction gave Telegram the leeway to provide documents in line with international privacy laws.

However, another filing on January 10 by the SEC claimed new evidence in the form of invoices from alleged underwriters. This new evidence raised suspicions hence their request for the bank details. This will see the case drag on for a few months as the investigations take place. If the investigations are not done by April, Telegram may be forced to reimburse GRAM tokens investors.

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