Court opened cross-border discovery in SEC’s Telegram token case

A federal court docketed an order on December 10, 2019 authorizing international judicial assistance in the Securities and Exchange Commission’s case against Telegram Group Inc. and TON Issuer Inc. The order advanced the regulator’s effort to obtain evidence from John Hyman, a United Kingdom witness connected to Telegram’s fundraising for the Telegram Open Network.

The Southern District of New York docket identifies the action as a request under the 1970 Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters. Judge P. Kevin Castel signed the order on December 9, and the clerk entered and transmitted it for processing on December 10. The distinction matters: December 10 is the verifiable docket date for this archive record, while the judicial signature bears the preceding date.

The order did not decide whether Telegram violated securities law. It authorized a discovery mechanism intended to bring evidence from outside the United States into a fast-moving enforcement case.

A $1.7 billion offering under examination

The SEC’s October 11, 2019 complaint alleged that Telegram raised approximately $1.7 billion between January and March 2018 by selling about 2.9 billion contractual rights to Grams to 171 initial purchasers. According to the complaint, 39 U.S. purchasers invested $424.5 million for more than one billion Grams.

Those figures were allegations in the SEC’s pleading, not findings reached by the court as of December 10. Telegram disputed the regulator’s characterization of the planned Gram distribution.

The SEC contended that the purchase agreements and planned delivery of Grams formed one unregistered securities distribution. Telegram’s position distinguished the purchase agreements—whose status as investment contracts was acknowledged—from the Grams that would operate on the proposed TON blockchain. That distinction placed the economic structure of the fundraising, the expectations communicated to purchasers and the intended secondary market at the center of the dispute.

The December 10 discovery order therefore mattered beyond the procedural paperwork. Evidence from a person involved in approaching or communicating with prospective purchasers could bear on how the offering was marketed, what buyers expected, how payments were arranged and whether the initial purchasers were intended to distribute Grams into a wider market.

Why the cross-border step mattered

Telegram’s corporate structure, management and purchaser base crossed several jurisdictions. The SEC’s complaint described Telegram Group and TON Issuer as British Virgin Islands companies with principal operations outside the United States. Obtaining testimony from a witness in Britain consequently required cooperation beyond an ordinary domestic subpoena.

The docket shows that the SEC filed its emergency, unopposed request for letters rogatory on December 6. Castel granted that request through the order entered December 10. Contemporaneous reporting described Hyman as Telegram’s former chief investment adviser and said the requested examination concerned his work helping raise money for TON. That description provides context, but the docket itself is the controlling record of what the court authorized.

For digital-asset issuers, the development illustrated that a token financing conducted through private agreements and international entities could still produce U.S. discovery extending across borders. It also showed how regulators were examining the full distribution plan rather than treating the future blockchain token in isolation from the fundraising contracts and purchaser network.

What remained unresolved on December 10

The order did not establish that Hyman had testified, that every requested document would be produced or that the SEC’s allegations were correct. The docket also notes that the main order PDF was replaced on December 11, creating a limitation for reconstructing the exact document available at each point on December 10.

No Gram distribution or open-market price resulted from the order. The case’s merits, the legal treatment of the planned delivery and TON’s launch prospects all remained unresolved on December 10.

Later context

On March 24, 2020, the district court granted a preliminary injunction blocking delivery of Grams. On June 26, 2020, the SEC announced court-approved settlements requiring Telegram to return more than $1.2 billion to investors and pay an $18.5 million civil penalty. Those outcomes are later context and were not knowable when the discovery order was entered.