The Securities and Exchange Commission in the United States has had a complicated relationship with the crypto industry since its inception and this only seems to continue even as the industry matures. There was the issue of initial coin offerings in which the Securities and Exchange Commission was forced to shut down thousands of them and are still investigating many to this day for being unregistered or being fraudulent. One of the latest issues has been an ongoing lawsuit with Telegram, an encrypted messaging platform, over their flagship token which the SEC has claimed is unregistered security.
In the latest developments in the case, the lawyers that represent Telegram have sent a letter to Judge P. Kevin Castel at the Daniel Patrick Moynihan United States Courthouse in New York stating that a request by the Securities and Exchange Commission requesting for Telegram’s bank statements be thrown out.
Latest in the Case
The question was sent on January 3, 2020, by Skadden, Arps, Slate, Meagher & Flom LLP which is the law firm representing Telegram and describes the Securities and Exchange commission’s case as an unfounded fishing expedition.
The Securities and Exchange Commission had sent a letter to the judge on January 2, 2020, requesting Telegram’s bank statements and as a result of this, Telegram was given less than 24 hours to produce these documents. This was in a bid to uncover how Telegram spent the $1.7 billion they raised during the initial coin offering. However, they are fighting back against this.
“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 says, “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.”
Now, it is up to the judge to decide whether to honor the SEC’s request for Telegram’s bank statements or throw out the request as per the letter sent by Telegram. Regardless, it seems this case only gets more complex as time goes on.