Telegram Refuses to Reveal ICO Financial Report with SEC

US SEC said that Telegram refused to share the ICO financial report of its token sale. The SEC requested Telegram to provide documents, including the amount it spent on the $ 1.7 billion which it raised from investors in an SAFT sale. These documents are “very relevant” in this case, says the SEC.

03 January, 2020 | AtoZ Markets – Telegram seems hesitant to provide the Securities and Exchange Commission (SEC) with financial details related to its initial coin offer (ICO). The SEC said Telegram refused to share financial details related to its $ 1.7 billion worth token sale.

SEC Asked for a Court Order to Reveal Telegram’s Bank Records

In a lawsuit filed in court on Thursday, the US market regulator asked for a court order. That will force the company to reveal its bank records. It will show how it has spent the raised funds in the past two years. According to some media, the court filing by the plaintiff stated:

“The plaintiff respectfully takes steps to compel the defendants to answer questions and provide documents. The documents are regarding the amounts, sources and use of funds raised from investors in connection with the unregistered sale of the securities at issue in this case.”

“The defendants are now refusing to disclose bank records of how they spent the $ 1.7 billion they have collected from investors in the past two years. And the defendants are also refusing to answer questions about the disposition of investor funds “.

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SEC Sued Telegram for $1.7 Billion Worth SAFT Sale

SEC asked Telegram to provide documents. It included “how much money Telegram has spent, and how, in the development of the TON Blockchain, and related applications.” The SEC said these files are “very relevant” to the case.

In October 2018, the SEC sued Telegram for making an “illegal” sale of “digital securities called Grams “. Telegram raised $ 1.7 billion from 171 investors using a Simple Agreement for Future Tokens (SAFT). In a SAFT sale, a company promises tokens when a project becomes operational.

Telegram has raised funds to create its blockchain, Telegram Open Network (TON), which has yet to be launched. The blockchain was originally scheduled to launch on October 31, but Telegram recently said that the SEC lawsuit made the launch timing “unachievable.”

The messaging application provider, therefore, wanted to extend the launch date for TON to April 30, 2020. The investors accepted the postponement and did not demand money back from Telegram.

The case is still ongoing. Telegram, for its part, has denied all of the SEC’s allegations. The company recently claimed:

“If and when” Gram tokens are launched, “they will constitute a currency and/or commodity. It is not securities under federal securities laws”.

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