The US Securities and Exchange Commission (SEC) filed a court order on Jan. 2 asking a New York federal judge to compel messaging platform Telegram Group Inc. to hand over the details of how the alleged $1.7 billion raised in its Initial Coin Offering (ICO) have been spent.

In the emergency file motion filed on Thursday in the US District Court for the Southern District of NewYork, the SEC claims that the bank records are highly relevant to the ongoing case against Telegram, alleging the digital asset class was an unregistered securities offering.

“The requested bank records are highly relevant to the issues in dispute in this 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.”

As per the filing, the agency is requesting for both documentation and testimony from Telegram regarding the use of the funds raised from investors and sources. SEC’s motion states,

“Defendants are now refusing to disclose the bank records concerning how they have spent the $1.7 billion they raised from investors in the past two years and to answer questions about the disposition of investor funds.”

Back in October, the SEC announced that Telegram and its Gram (GRM) token sale constitutes an unregistered digital token offering and consider it “unlawful”. The regulator filed a restraining order against the company and Telegram Open Network (TON).

At the time, Stephanie Avakian, the co-director of the SEC’s Division of Enforcement said,

“Our emergency action today is intended to prevent Telegram from flooding the U.S. markets with digital tokens that we allege were unlawfully sold.”

This resulted in a delay in the launch of the TON blockchain.

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