Copy link
Increase text size
Decrease text size
Link copied

U.S. SEC sues Kik Interactive over $100M ICO, says KIN is a security

Image Via Money Crashers

Wed, 05 Jun 2019, 05:34 am UTC

The United States Securities and Exchange Commission (SEC) has sued Kik Interactive, the company behind the chat platform Kik, for conducting an illegal $100 million securities offering of digital tokens in 2017.

The SEC alleges that the company had predicted to run out of money in 2017 and sought to pivot to a new business, which was funded through the token sale.

“Kik sold its “Kin” tokens to the public, and at a discounted price to wealthy purchasers, raising more than $55 million from U.S. investors,” the SEC said.

In its complaint, the SEC alleges that Kik marketed the Kin tokens as an investment opportunity, telling investors that rising demand would push the value of Kin higher. To boost this demand, the company allegedly said that it would “undertake crucial work” such as incorporating the tokens into its messaging app, creating a new Kin transaction service, and building a system to reward other companies that adopt Kin.

“At the time Kik offered and sold the tokens, the SEC alleges these services and systems did not exist and there was nothing to purchase using Kin,” the SEC noted.

Importantly, the SEC has alleged that the Kin offering involved securities transactions, and said that the company was required to comply with the registration requirements of the U.S. securities laws.

“By selling $100 million in securities without registering the offers or sales, we allege that Kik deprived investors of information to which they were legally entitled, and prevented investors from making informed investment decisions,” said Steven Peikin, Co-Director of the SEC’s Division of Enforcement.

The regulator is seeking a permanent injunction, disgorgement plus interest, and a penalty.

Kik Responds

The Kin Foundation, which oversees the Kin token, has already initiated a campaign to take on the SEC. Last month, it announced that it is setting aside $5 million with Coinbase for funding a potential legal battle with the regulator. ShapeShift, Arrington XRP Capital, Messari, and Fight for the Future have come forward to support Kin in this initiative.

Commenting on the SEC’s recent action, Kik's CEO, Ted Livingston, said that they were already expecting such enforcement action from the SEC for quite some time. He said that the SEC's complaint is a “highly selective and grossly misleading picture” of the facts and circumstances surrounding the 2017 pre-sale and token distribution event.

“We welcome the opportunity to fight for the future of crypto in the United States. We hope this case will make it clear that the securities laws should not be applied to a currency used by millions of people in dozens of apps,” he said.

<Copyright © TokenPost. All Rights Reserved. >

  • Bitcoin (btc) $22,845.00 (-2.33%)
  • Ethereum (eth) $1,632.00 (-2.18%)
  • BNB (bnb) $325.29 (-3.00%)
  • USD Coin (usdc) $1.00 (+0.03%)
  • XRP (xrp) $0.398232 (-3.10%)
  • Bitcoin (btc) $22,845.00 (-2.33%)
Jul 15, 2021 (Thursday)
13:30
BTC Surges by 1.16% Within 5 Mins, Marking 31,824.01 USDT
12:06
BTC Surges by 1.12% Within 5 Mins, Marking 32,104.8 USDT
10:25
BTC Drops by 1.03% Within 5 Mins, Marking 32,171.88 USDT
02:13
TriumphX Scouts 'MINAMCOMPANY' CEO Woo-Seong Lee As Creative Director
02:00
ETH Tops List Of Crypto Net Inflow With $298.96 Mln In Past 10 Hours
Jul 14, 2021 (Wednesday)
13:14
BTC Surges by 1.03% Within 5 Mins, Marking 32,738.08 USDT
09:03
BTC Surges by 1.01% Within 5 Mins, Marking 31,899 USDT
02:30
Crypto Market Sentiment On Jul 14: Market In "Extreme Fear"
02:00
ETH Tops List Of Crypto Net Outflow With $224.97 Mln In Past 10 Hours
Jul 13, 2021 (Tuesday)
02:30
Crypto Market Sentiment On Jul 13: Market In "Extreme Fear"
02:00
ETH Tops List Of Crypto Net Outflow With $178.61 Mln In Past 10 Hours
Jul 12, 2021 (Monday)
02:30
Crypto Market Sentiment On Jul 12: Market In "Extreme Fear"
02:00
BTC Tops List Of Crypto Net Inflow With $164.82 Mln In Past 10 Hours
Jul 11, 2021 (Sunday)
21:31
BTC Surges by 1.02% Within 5 Mins, Marking 34,475.6 USDT
10:00
ETH Tops List Of Crypto Net Inflow With $122.76 Mln In Past 18 Hours
06:17
SOBA Listed On LATOKEN
02:30
Crypto Market Sentiment On Jul 11: Market In "Extreme Fear"
02:00
BTC Tops List Of Crypto Net Outflow With $87.56 Mln In Past 10 Hours
Jul 9, 2021 (Friday)
21:40
BTC Surges by 1.08% Within 5 Mins, Marking 33,911.8 USDT
02:30
Crypto Market Sentiment On Jul 09: Market In "Extreme Fear"
Subscribe to the TokenPost newsletter!
Don't show me this again today.
Back to top
Copyright ⓒ TokenPost. All Rights Reserved.