Telegram Agrees to Release Critical Communications and Bank Records to the SEC

Telegram, the popular mobile messaging company, has announced that it will hand over its bank documents and communication receipts to the United States Securities and Exchange Commission (SEC) as part of their ongoing legal battle over the firm’s crypto endeavors.

Telegram’s Campaign to Save the TON

Earlier this week, the London-based firm confirmed in court documents that it had reconsidered its stance on records disclosure and would now provide the financial regulator with its banking documentation.

The development is coming as the latest in a string of events concerning Telegram’s legal battle with the SEC over the status of its Telegram Open Network (TON) blockchain and its native digital token, the GRAM.

While the firm was set to launch both projects in October last year, the SEC eventually nixed the plan. At the time, the agency accused the firm of selling unregistered securities when it conducted an Initial Coin Offering (ICO) in 2018 – two token sales, where the firm managed to raise $1.7 billion.

Telegram initially confronted the accusation, and thus began the months-long battle between both parties.

The SEC initially requested the information towards the end of last year, explaining that the time that the request for the bank records would help to determine how the company spent the capital made from its token sales in 2018. The request is consistent with the SEC’s argument that Telegram’s 2018 ICO was to fund the development of the TON.

The firm initially rejected the SEC’s request to see its banking and communication records in January 2020. However, Thursday’s court documents show that it has now made a u-turn.

Per the release, consequent on the agreement of the parties involved, Telegram will provide the SEC with “information regarding any assets disbursed to Initial Purchasers under the Purchase Agreements and assets received from Initial Purchasers.” Telegram has also agreed to answer queries on old bank records too already gotten by the SEC.

Furthermore, the agreement requires Telegram to provide receipts of their communication with Initial purchasers of their tokens in order to determine the terms of the agreement. All communication receipts will show if the company has made any adjustments to the purchase agreements that it made with its ICO investors in 2018.

Negotiating the Future of the TON Blockchain

The SEC legal battle has forced Telegram to halt all development and expansion plans with the TON. For now, the firm, as well as its issuers, have announced that they would be pushing the release of the TON blockchain to April 2021. As they explained in a letter, the postponement would give the company enough time to fight their legal battle and get back on track.

However, a group of independent developers and validators released a free version of the TON blockchain on May 7.

In a live launch on a Zoom call, the group affirmed that the version of the TON blockchain was autonomous of Telegram or the TON Issuers Inc. They explained that the version would help bring a decentralized system to users, adding that it is a necessary preparation before the launch of the TON blockchain.

For now, it’s unclear how – and if – Telegram and its invention will survive the prolonged hunt by the SEC.