SEC Requests Telegram Banking Data as New Evidence Emerges

The timing of the request, filed on Jan. 10, coincides with new evidence of alleged underwriters requesting commission fees for the sale of Telegram tokens.

The request for banking data comes four days after a similar filing was declined "Without prejudice" - meaning that the SEC was free to try again.

Telegram challenged the request arguing that doing so would be a violation of foreign data privacy statutes.

In a conversation with Cointelegraph, Philip Moustakis, attorney at Seward & Kissel LLP and former SEC counsel, said that he believes "That the court will eventually require Telegram to turn over the bank records that the SEC seeks."

Moustakis continued to explain that the existence of these filings indicated disagreement between Telegram and the SEC, saying "Discovery disputes only get to the courts when there's a problem." He elaborated that the final resolution of the issue of these bank records may well happen between the two parties outside the court.

The SEC began action against Telegram's $1.7 billion ICO in Oct. 2019.

The commission argues that the token offering was an unregistered sale of securities, while Telegram maintains that it was exempt from registration due to several legal details.

The evidence shows two third-party companies invoicing Telegram for fees deriving from Gram token sales to external investors.

The filing alleges that Telegram previously showed lack of good faith in the discovery process, which it argues "May weigh in favor of the SEC." The attorneys referenced an Oct. 2019 request for all third party agreements relating to the Telegram Open Network blockchain, which were produced only on the day of the filing on Jan. 10.

Telegram remains unable to launch the TON blockchain, delaying what was already considered a late start.