Telegram ordered by Southern New York District Judge, Kevin Castel, to reveal all relevant financial information from its GRAM token sale including all banking records and details by February 26th this year. The judge had previously blocked the Securities Exchange Commission (SEC) from accessing all the documents setting a scope of financial details 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 13th, the messaging app company will be required to release 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.”
After several extensions on the deadline of the supposed release of the bank records, the court stated it will not extend the deadline to produce the financial records past Feb. 26th.
While Telegram’s request for additional five-to-seven weeks has been accepted, the disclosure of full records to the SEC may come as a blow to its cryptocurrency project and 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 $1.7billion USD raised from the ICO sale of GRAM tokens. After an initial request was denied by the Southern District of New York, offering Telegram the leeway to provide documents in line with the international privacy laws.
However, another filing on January 10 by the SEC claimed new evidence in the form of invoices from alleged underwriters, which raised suspicions hence their request for the bank records. 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 investors the money they invested in the GRAM ICO as stipulated in the contract.