- The Securities and Exchange Commission (SEC) has presented new evidence to prove that Telegram was involved in the public sale of the GRAM token by two companies.
- Telegram requests extension to propose schedule for presentation of witnesses and documents required by the SEC
The Securities and Exchange Commission (SEC) has presented new documents in its case against Telegram for the issue of the GRAM token. The SEC has found evidence supporting the post-ICO sale of the token. Two companies are alleged to be related to the sale, Da Vinci Capital Investment Fund and Gem Limited.
Telegram has repeatedly denied that it was involved in trading the Gram token after the issuance of the ICO and after the injunction against Telegram Group Inc. The messaging company recently divested itself of all companies that made a pre-sale of the token. Telegram claims that they did so without the company’s consent. However, the SEC has submitted two invoices that were sent to Telegram by the companies involved. The investment firms are charging Telegram the total amount of $1.3 million for commissions from the sale of Gram.
New evidence could decide case against Telegram
SEC’s allegations against Telegram are based on the argument that the Gram token is an unregistered security, therefore, the issuance of the ICO and the subsequent sale of the token are in violation of SEC regulations. Until now, the regulator was unable to present tangible evidence to support its arguments.
The new document presented shows that Da Vinci Capital and Gem Limited handled the sale of Telegram’s tokens to three other entities for profits in excess of $10 million. The firms involved with the purchase of the tokens are ITI Funds, Goliat Solutions and Space Investments Limited. The document dates the transactions to July 2018, several months after the conclusion of the ICO issued by the messenger company.
In the document, the SEC states the following about the evidence presented:
These documents undermine Telegram’s claimed affirmative defense that the Offering was exempt under Regulation D. First, Telegram either raised more than the $1.7 billion for which it claimed an exemption, or it did not raise $1.7 billion as of March 29, 2018 and the later funds may have been raised through underwriters
Telegram requests extension to comply with SEC order
As reported by CNF, the SEC ordered Telegram to produce documents and other material on the ICO issued based on the token GRAM. The messenger company refused and its decision was upheld by the court. However, Telegram still had to prove that it had not violated the foreign privacy laws of the United States.
Therefore, the court determined that Telegram must submit a calendar setting forth the dates for submitting bank records and documents accounting for its financial activities. The messenger company was to comply with the court’s mandate by January 9 of this year, but Telegram said it would need 5-7 weeks to make the proposal.
The reason for the delay is that the SEC’s request requires Telegram to produce testimony, documents and records from more than 770 individuals or institutions in about 12 countries. According to the Inner City Press news portal, the law firm handling the Telegram case has only been able to review about 70 of the total number of institutions referred since the start of the SEC investigation.
The issuance of the Telegram Open Network’s (TON) token was postponed by Telegram with the support of its investors. The company agreed to delay the launch until April 30th 2020, but with the new calendar of presentation of evidence the date could be postponed again.