The U.S. market regulator, the Securities and Exchange Commission (SEC), has requested that the messaging service provider Telegram delivers bank records pertaining to the initial coin offering of their GRAM tokens, which have been proclaimed an unregistered securities offering by the regulator, Cointelegraph reports on January 14th.
The regulator claims that “There is no question that Telegram’s bank records are of critical relevance to this litigation. Defendants are correct that Howey mandates an objective test to determine whether investors in Grams had reasonable expectations of profits from their purchase. But it is equally true that post-investment actions by the parties ‘can serve as evidence’ of the parties’ expectations.”
In what has become a game of cat and mouse, the U.S. regulator seems determined to go through with the case against Telegram, despite the fact that the company is rejecting all accusations and claiming their token offering did not represent an investment. However, as the regulator seems bent on pushing this to the end, Telegram is likely looking at an extended and expensive legal battle, which are most likely to lose unless they comply with the regulators wishes and get offered some kind of a settlement we've seen most conflicts like this end.