The Kin Foundation, which oversees the cryptocurrency developed by the chat platform Kik, has initiated a new campaign to fund a potential legal battle with the United States Securities and Exchange Commission (SEC), Forbes reported.
Kin has announced that it is setting aside $5 million with Coinbase for the initiative called DefendCrypto.org. It said that this initial capital might not be enough for securing the “future of crypto” and has called upon the industry to join the initiative.
According to the website, the initiative has already started garnering support from the industry. Backers include Circle, ShapeShift, Arrington XRP Capital, Messari, and Fight for the Future.
Michael Arrington, founder of TechCrunch, CrunchBase and Arrington XRP Capital, said that the SEC is “out of control, and hurting our industry with indecision.” He said that Arrington XRP Capital will make its donation to the KIN fund later this week.
Speaking of the aforementioned potential legal battle, the issue stems from the Kin token sale held in September 2017. The SEC, believing Kin to be a “security” (which Kik says is a “currency”) sent its first inquiry to the team three days after the token sale ended, which it followed by various subpoenas, meetings, and testimonies.
“After months of trying to find a reasonable solution, Kin has been unable to reach a settlement that wouldn’t severely impact the Kin project and everyone in the space. So Kin is going to take on the SEC in court to make sure there is a foundation for innovation going forward,” the website reads.
On the podcast Unchained, Kik founder and CEO Ted Livingston said:
"When we speak to people in the industry, we need to stop living under this cloud of fear, what will the SEC think? What will the SEC think? Because we all know [crypto] is the next mega-trend of technology and by always having to ask ourselves, 'What will the SEC think?,' we are giving ourselves a fundamental handicap to compete on the global stage. Enough is enough, we need clarity, and the only way we’re going to get clarity is if we go to court, so let’s do that.”
Kik believes the case will set a precedent and could serve as the new Howey Test for how cryptocurrencies are regulated in the United States.
“Kin has already spent over $5MM and is committing another $5MM of BTC, ETH, and KIN in a Coinbase account to fight this out on behalf of the industry,” it added.
“If you too are fed up with this innovation tax, we encourage you to contribute also as we take on the SEC on behalf of the future of crypto in the US. Any additional contributions will be held with Coinbase and will only be used if that $5MM isn’t enough. In that case, expenses will be disclosed, and — after a court decision is made — the Defend Crypto fund will allocate the remaining resources to other initiatives.”