The US Securities and Exchange Commission (SEC) has been informed that it will not be given full access to Telegram’s financial details.
Messaging service Telegram is under investigation by the US regulator for the company’s Gram token sale, which raised $1.7 billion from accredited investors, many of whom were US citizens.
As a result, the SEC has argued that Telegram was selling unlicenced securities.
As reported by Coin Rivet on January 3, the SEC formally requested that the Southern District of New York Court pass a motion forcing Telegram to disclose its financial and banking information to support the case.
The SEC claimed that the information was central to its investigation of Telegram’s token sale, writing:
“Full disclosure of the sources, amounts, dates, and uses of funds are central to the SEC’s claims that Telegram violated Section 5 of the Securities Act by engaging in unregistered offers and sales of Grams.”
However, according to a report by Finance Feeds, the court has now denied the motion without prejudice.
Despite this, the SEC will be granted access to limited financial information from Telegram to the extent necessary for its investigation.
Telegram has until January 9 to present a schedule for the review of its financial information.
Telegram delays launch of the TON network
As a direct result of the SEC proceedings, Telegram has indicated that it may have to delay the launch of its TON blockchain – in which Gram tokens play a central role.
Since the lawsuit, Telegram has sought to clarify what the TON network is and how Grams function within the ecosystem, publishing a public notice on January 6 to address investor concerns.
The recent communication from the firm reiterated that Grams were not sold with any equity rights or ownership interest in Telegram, nor do they offer any dividend or governance rights.
Telegram has also indicated that depending on the ruling by the SEC, it may be required to refund investors entirely, which would likely bring the planned TON network to a complete halt.
Likewise, the popular Telegram messaging app will not feature the TON wallet until the company has received full regulatory approval.
For more information on the SEC vs Telegram case, click here.