Telegram will release bank records that the United States Securities Exchange Commission believes will prove misconduct in the latter’s $1.7 billion offering of Gram tokens.

International privacy laws and the new information

Per a Jan. 13 filing with the court of the Southern District of New York (SDNY), Telegram will have until Feb. 26 to provide the court with the bank records that the court denied the SEC in an earlier ruling that was based on privacy concerns.

Today’s ruling will allow Telegram to redact the information provided to the court in accordance with foreign privacy regulations. According to a letter to the court from the attorneys for the defense, Telegram — a company founded in Russia by Pavel and Nikolai Durov and currently based in Berlin — will provide the SEC with these bank records in full by Jan. 15, only redacting them before submitting them to the public record.

The fact that Telegram’s attorneys have agreed to provide the SEC with full bank records, while the public will have access to redacted versions means that all eyes will be on the SEC’s next move as a bellwether of what they do or do not find in the new documents. Philip Moustakis, an attorney with Seward and Kissel and formerly senior counsel at the SEC, told Cointelegraph that the SEC will be on alert for evidence of Telegram’s “Failing to exercise reasonable care to ensure that the purchasers were not acting as underwriters.”

The story of the bank records

As Cointelegraph reported, the SDNY denied the SEC’s original request for information earlier in January but did so “without prejudice,” leaving the subject open to further discussion.

On Jan. 10, the SEC produced invoices from alleged underwriters to Telegram’s sale of Gram tokens that the SEC believes demonstrate offering of Gram tokens outside of their approved timeline.

SEC v. Telegram in brief

The saga of the U.S. regulator and the messenger service began in earnest on Oct. 11, when the SEC filed an emergency action demanding a cease-and-desist in Telegram’s offering. The SEC called the sale of Gram tokens an unregistered securities offering, while Telegram argued that it qualified under Regulation D exemptions to the requirement to register as such an offering.

The SEC has been examining opportunities to adapt its Reg. D exemptions, which are dependent on making offerings to “accredited investors” alone, who by the logic of U.S. securities law does not require the same degree of regulatory protection as main-street investors. Despite this ongoing reconsideration, the commission has persisted in identifying Telegram’s offering as a security offering, meaning that the case will continue.