The SEC vs Telegram legal scuffle has taken another twist today as the instant cloud messaging app decides not to share its controversial ICO financial details with the U.S. Securities and Exchange Commission (SEC), Finance Magnates reported today.
After garnering over a billion dollars through two token sales conducted in 2018 in an attempt to develop and promote Telegram Open Network (TON) blockchain, the popular social media app attracted a lot of limelight. Within no time, it got itself involved in a legal battle with the US federal agency over illegally conducting the token sales and refusing to comply with the regulations.
The prolonged court battle claimed its first victim in November last year when Telegram finally decided to postpone the launch of its much-anticipated TON blockchain. It also called for the deposition of the Telegram founder himself, Parel Durov, along with two more senior employees before the US SEC, which is expected to be carried out sometime later this month.
SEC vs Telegram: Telegram refuses to cooperate
According to the SEC, Telegram’s native token Gram, in fact, qualifies as security; however, the company has failed to make the registration accordingly. Thus, the SEC recently assumed a stricter approach and demanded that Telegram produces complete financial records from the last two years. However, in a court filing from Thursday, the Russian messaging service has declined this request and refused to share its financial records with the SEC.
Per the court filing, the plaintiff had respectfully requested the defendant to produce any documents that are in connection to the unregistered token sale conducted back in 2018 and share the requisite information, amount, origins of the funds and investor details at the earliest. However, the defendant has now decided to withhold this data and hold up the investigation by concealing the bank records that demonstrate what they have done with the one and a half billion US dollars ($1.7 billion) they raised in the past two years, the complaint stated.
For the SEC, these documents are extremely critical to move headway with the investigation as they prove Telegram’s intentions with the raised money and its actual development program for the TON blockchain.
Meanwhile, amid this war of words, as Gram token prepares for a grand-scale launch this year, a much-followed crypto analyst and trader, Tone Vays, pulled the disputed token to pieces by issuing a scam alert. Is this what you call creating money?, Vays questioned. I think Telegram is merely looking to make massive profits by capitalizing on Gram, but it isn’t following the equity rules by distributing the shares of the company. This, in my opinion, is downright unfair, he asserted.
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