Telegram Wins Court Battle Over Bank Records in SEC Case

SEC’s Attempt to Reveal Bank Records Denied

The Southern District of New York has delivered a blow to the U.S. Securities and Exchange Commission (SEC), turning down the regulatory body’s request to access Telegram’s bank records. In a decision penned by Judge P. Kevin Caste on January 6, 2020, the court deemed the SEC’s application as premature and, quite frankly, a little overreaching.

The SEC’s Fishing Expedition

This court ruling follows the SEC’s January 2 application to compel Telegram to disclose how it allocated a staggering $1.7 billion raised during its initial coin offering (ICO) back in 2018. Telegram’s legal team, not one to mince words, described the request as an “unfounded fishing expedition”—which is both a great metaphor and a somewhat amusing image if you think about it.

Data Privacy and Compliance Challenges

While the court sided with Telegram, it wasn’t a total victory; the company still faces the challenge of demonstrating that its bank records adhere to foreign data privacy laws. According to the court order, Telegram is required to present a proposed schedule by January 9, 2020, to verify that any requested records protect customer privacy. It’s enough to make anyone think a degree in data protection law is necessary just to keep your bank statements private!

Telegram’s Focus on Compliance

Coinciding with this ruling, Telegram released detailed summaries regarding its Telegram Open Network (TON) and the associated Gram tokens. The company has been walking a tightrope, clearly stating that it aims to avoid any misunderstandings about its products and their legal implications. “Telegram has been careful not to speak publicly about these rumors while we continue to build the TON Blockchain platform,” they noted—quite the balancing act, don’t you think?

Future Uncertain for TON and Gram Tokens

The SEC’s scrutiny is part of a broader Wednesday in October 2019 when the regulatory agency initially pushed back against Telegram, effectively halting the launch of TON indefinitely. As both sides remain locked in a battle over the classification of Gram tokens—whether they are securities or merely currency—the upcoming deposition of Telegram CEO Pavel Durov, expected on January 7 or 8, will be one to watch closely. Will he spin a tale worth millions or just discuss the price of tea in China? Only time will tell!