Telegram agrees to hand over communications to SEC

A big part of the U.S. Securities and Exchange Commission’s (SEC) case against Telegram, as an alleged unregistered security offering, revolves around how the digital asset was marketed to potential investors ahead of its 2018 initial coin offering (ICO). That makes a May 7 consent agreement by Telegram to hand over its communications a huge step forward in the regulators court case.

In an order of consent, filed by Telegram on May 7, the company has agreed to hand over communications and documentation requested by the SEC, according to the Inner City Press. The communications specifically pertain to the distribution of Telegram’s Gram tokens and purchase agreements relating to its 2018 initial coin offering (ICO).

The company has agreed to hand over the requested documents by May 20. It will also hand over bank records, and respond to questions specifically concerning financial statements they’ve already handed over. Documents also pertaining to “any assets disbursed to Initial Purchasers under the Purchase Agreements and assets received from Initial Purchasers in connection with the termination of the Purchase Agreements” will be provided.

At this point, Telegram doesn’t have anything left to gain by fighting the SEC. Courts have sided with the SEC at every step, blocking Telegram from launching their blockchain due to the concern that it was for an unregulated security. That has put Telegram in the precarious position of having to pay back U.S. investors 72% of their initial investment, effectively cutting out any American involvement in the project going forward.

That’s left Telegram to make promises to investors in other parts of the world, offering to give them 110% of their investment when the network eventually does launch. At this point, they’re hoping they can do so by April 2021. But with token sales halted worldwide, the loss of U.S. investors puts even that far off date in jeopardy, and ongoing court battles aren’t making anything better.

And if all of that isn’t bad enough, the Free TON community has launched an independent blockchain, defying regulators and putting Telegram in between a rock and a hard place. Do they continue to fight and prove that they have a legal offering on their hands, and hope to launch legitimately, or do they slide into the grey area of the law once again, in a hope to not lose market share against a legally questionable competitor?

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