On January 6, according to District Court for the Southern District of New York, Judge P. Kevin Caste signed an order in which the court has denied an application by the U.S. Securities and Exchange Commission (SEC) to make Telegram reveal its ICO bank records.
Telegram has to show its obey with data privacy laws
The new court decision relates to a Jan. 2 application by the SEC to force Telegram to reveal the details of how the company spent $1.7 billion raised in its initial coin offering (ICO) in 2018. On Jan. 4, Telegram’s lawyers officially requested that the application be thrown out, calling it an “unfounded fishing expedition.”
Even though the court supports Telegram in this case, the company will still have to show the evidence that its ICO bank records comply with foreign data privacy laws. The court order wrote that the defendant will have to set a declaration of the proposed schedule for a review of the requested bank records on January 9 in order to prove that the production of such records follow to the foreign data privacy laws.
Telegram released a public announcement about the matter
The court’s decision released on the same day that Telegram revealed a summary of its Telegram Open Network (TON) and corresponding Gram tokens. In the post, the company has carefully not admitted spurious claims about its products in order to comply with relevant laws.
The post read that Telegram was careful not to speak openly about these rumors when we carry on building the TON Blockchain platform and work out to ensure that the TON Blockchain and Grams can operate in a way that is compliant with all relevant laws and regulations.
The company also stressed that Gram is not an investment product, which imply token is not a security and is outside of the SEC’s jurisdiction.
The SEC’s request is part of the regulator’s emergency action against Telegram that was initially filed in October 2019. The request came a few weeks before TON was scheduled to launch which makes the release of the network has been postponed indefinitely.
The SEC and Telegram keep on arguing on the status of Gram token. While the SEC claims that Gram is security, Telegram claims that Grams will merely be a currency or commodity after activating TON.
Telegram CEO Pavel Durov is expected to give an attestation in the case on Jan. 7 or 8, 2020, following a court order issued in November 2019.
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