Telegram will have to hand over its bank records to the SEC after all, meaning the SEC will finally learn how Telegram spent the $1.7 billion raised in its ICO for its upcoming blockchain network, the Telegram Open Network.
The US District Court for the Southern District of New York ruling, filed yesterday, comes under a “Confidentiality Order,” where “only redactions necessitated by foreign privacy laws shall be permitted.” Telegram has to produce the records by February 26.
Telegram, known for its 300 million strong messaging app, is in the courts over TON because the SEC alleges that its native currency, the Gram, is a security. If the court rules in the SEC’s favor, Telegram might have to give the money it raised back to investors.
Telegram had previously refused to hand over its records to the SEC. The SEC said that Telegram had produced an “incomplete production” of its bank records, which only showed “credits, and not debits showing how Telegram spent the investors' money."
"Telegram's refusal to produce this information to the SEC—and its suggestion that it may not have access to its own bank records because it has changed banks—is unfounded and deeply troubling," wrote the SEC.
The SEC’s court case has already postponed TON, which was originally due for release on October 31. But Telegram agreed to hold off on launching until the matter is settled with the SEC.