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In response to the SEC’s request for its bank records, encrypted messaging giant Telegram has requested a U.S. court to reject the regulator’s demands, Cointelegraph reported.
Just recently, the Securities and Exchange Commission (SEC) requested a court order which would force the company to disclose its bank records, which would reveal how it spent the $.17 billion raised in its initial coin offering (ICO).
The SEC had argued that Telegram’s bank records were highly relevant to the ongoing 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.”
Telegram reportedly had less than a day to respond to the request.
Skadden, Arps, Slate, Meagher & Flom LLP termed the SEC’s request as an “unfounded fishing expedition” in a letter to Judge P. Kevin Castel at the Daniel Patrick Moynihan United States Courthouse in New York on Jan. 03.
“On behalf of Defendants, we write in opposition to the letter motion filed by (the SEC), seeking to compel the production of voluminous and highly sensitive bank records that have little to no bearing on the claims and defenses in this action and would impose undue burdens on Defendants,” the letter reads.
“Plaintiff's letter misconstrues the legal issues in the case and omits critical facts. Defendants respectfully submit that Plaintiffs motion to compel constitutes an unfounded fishing expedition and should be denied.”
All eyes are now on Judge Castel, who will decide whether or not to approve the SEC’s request to compel Telegram to disclose the financial details.
Meanwhile, the deposition of Telegram CEO Pavel Durov is scheduled to commence on Tuesday. Last month, the SEC asked the U.S. court to send a Letter of Request to the Senior Master of the High Court to acquire a deposition from a U.K. citizen, John Hyman, the former chief investment advisor of Telegram.
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