Court Denies SEC Request to Make Telegram Reveal ICO Bank Records

The District Court for the Southern District of New York has denied a request by the United States' securities regulator to make Telegram reveal its bank records.

Telegram must prove that its bank records comply with data privacy lawsThe new court decision refers to a Jan. 2 application by the SEC to compel Telegram to share the details of how the firm spent $1.7 billion raised in its initial coin offering in 2018.

Despite the court deciding in favor of Telegram, the company will still have to prove that its bank records comply with foreign data privacy laws.

"The Court denies, without prejudice, plaintiff's application to compel the production of defendant's bank records. By January 9, 2020, defendant shall set forth in a declaration a proposed schedule for a review of the requested bank records to ensure that production of such records complies with foreign data privacy laws."

Telegram releases public notice on its productsThe court's decision came on the same day that Telegram released a series of summaries about its Telegram Open Network and corresponding Gram tokens.

"Telegram has been careful not to speak publicly about these rumors while we continue to build the TON Blockchain platform and work out the exact details of the project to ensure that the TON Blockchain and Grams can operate in a way that is compliant with all relevant laws and regulations."

The SEC's request to reveal Telegram's ICO records is part of the regulator's emergency action against Telegram that was initially filed in October 2019, a few weeks before TON was scheduled to launch.

As the launch of the network has been put on hold indefinitely, the SEC and Telegram continue to argue on the status of Gram token.

While the SEC believes that Gram is security, Telegram claims that Grams will merely be a currency or commodity once TON is active.

Telegram CEO Pavel Durov is expected to give a deposition in the case on Jan. 7 or 8, 2020, according to a court order issued in November 2019.