The case between the U.S. Securities and Exchange Commission (SEC) and the encrypted messaging platform Telegram takes another turn. The latter has reportedly refused to hand over financial details regarding its ICO from two years ago, which was recently requested by the market regulator.
Telegram Does Not Want To Share
After raising over a billion dollars in two token sales in 2018 for the development of its Telegram Open Network (TON) blockchain, the company attracted a lot of attention to itself. The SEC reacted quickly and temporarily halted the token sale, outlining that it failed to comply with existing regulations.
The situation escalated further when the market regulators requested a court order to allow them full access to Telegram’s financial records. According to the SEC, Telegram’s future coin Gram comes under the securities category and the company has failed to register it as such.
However, it appears that Telegram feels hesitant about the issue and doesn’t want to share its data:
“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.”
SEC officials have purportedly stated that these records are essential to the issue in dispute. They should be used to prove how Telegram has operated with the raised funds when it comes down to developing the TON blockchain.
Gram was supposed to be launched late last year but it was delayed which attracted the attention of the cryptocurrency community, as well. People started speculating if this is a premeditated attempt from the company to create some sort of a scam.
One of the most popular traders and analysts, Tone Vays, was rather vocal about it when he raised his concerns about the potential usage of Gram:
“Are they creating money for the world? Or are they simply finding a way to monetize their company? If you’re monetizing your company, you’re supposed to do it through the equity space. You are supposed to give shares of your company. You’re not supposed to invent money.”
Before concluding that Gram could turn out to be a scam project, it’s worth noting that it’s not the first-ever delayed project. Moreover, it comes from a large and established company, which should provide for a certain level of trust. With that being said, Telegram is not doing itself any favors by declining access to its financial records, thus delaying the case resolution, and ultimately its coin release.