Telegram Lawyers Notify Judge That SEC Undertakes ”Unfounded Fishing Expedition”

A United States court was requested to dismiss SEC‘s demands for Telegram’s bank accounts in the GRAM court case. The request was made by lawyers representing Telegram the encrypted messenger.

On January 3, Skadden, Arps, Slate, Meagher & Flom LLP sent a letter to judge P. Kevin Castel at the Daniel Patrick Moynihan United States Courthouse in New York, stating that demands of SEC (Securities and Exchange Commission) in regards to GRAM are an ”unfounded fishing expedition”.

Bank records have ”little to no bearing” on case

The SEC requested data regarding Telegram’s initial coin offering (ICO) from their GRAM token, which brought $1.7 billion to the company.

On January 2, a letter was sent to Judge Castel, which resulted in Castel giving the company less than one business day to reply.

The latest letter says the following:

“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 lawyers further note that “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.”

Telegram approaching critical point with SEC

Now Telegram is waiting for Castel’s decisions concerning SEC’s demands.

Telegram’s latest fail is one more link in a chain of prolonged legal process which still didn’t result in any specific action.

The SEC has also investigated a number of other ICOs for securities violations. A $100 million ICO of Canadian messenger Kik has attracted their attention, starting a legal war. In October the company had to cease operations.

Last month SEC chairman Jay Clayton said that the organization’s approach to cryptocurrency was ”measured yet proactive”.