Encrypted messaging platform is hesitant to hand over financial details related to its initial coin offering (ICO) to the Securities and Exchange Commission (SEC).
In a court filing on Thursday, the United States market regulator which will compel the company to reveal its bank records which will showcase how it spend the raised funds in the last two years.
“Plaintiff respectfully moves to compel Defendants to answer questions and provide documents regarding the amounts, sources, and use of funds raised from investors in connection with the unregistered sale of securities at issue in this case,” the court filing by the plaintiff stated.
“Defendants are now refusing to disclose the bank records concerning how they have spent the $1.7 billion they raised from investors in the past two years and to answer questions about the disposition of investor funds.”
One of the few ICOs breaching the billion-dollar mark
Telegram raised $1.7 billion in two token sale rounds in early 2018 for the development of its TON blockchain. Though the company from participating in the round, many got their hands on the tokens via third parties.
Last October, only around a month before the launch of Telegram’s blockchain, the US watchdog dragged the company to court alleging that Gram tokens fall under the category of securities and the company failed to register it with the regulator.
Due to the lawsuit, the firm also forced to delay its blockchain launch which was supported by its investors.
“The requested bank records are highly relevant to the issues in dispute in this case, including how much money Telegram has spent, and in what manner, in developing the TON Blockchain, the Telegram Messenger application to be integrated with the TON Blockchain, and related applications,” SEC’s request added.
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