The actions by the Securities and Exchange Commission (SEC) in the US that delayed the launch of the Gram digital tokens in late 2019 have now led to court proceedings, during which the SEC has requested that Telegram provide banking records to indicate how the $1.7 billion raised from investors has been getting spent by the company.

The regulator says that Telegram has already once avoided having to provide financial information to investors, including regarding the intended use of their funds, by failing to register its sale of Grams and thus not providing a statutory prospectus.

According to the SEC, the requested bank records are highly relevant to the issues in dispute in the case, including how much money Telegram has spent, and in what manner, in developing the TON Blockchain, the Telegram Messenger application to be integrated with the TON Blockchain, and related applications. Also, the evidence is seen as relevant to the efforts Telegram has made to ensure the viability and profitability of the Grams it sold.

This case highlights the increased scrutiny that seemingly legitimate and viable blockchain projects have faced from US regulators in recent months, significantly delaying the roll-out of highly anticipated digital tokens and assets.