Kik Hits Back at the SEC with its 130-Page Response, Claims Allegations are “Solely Designed For Misdirection”
- Kin Token Sale wasn’t a Hail Mary
- The Case Takes a Toll on Kin’s Price
Kik fights back the Securities and Exchange Commission (SEC) lawsuits that climb $100 million token sales was illegal.
In a 130-page filing released in US District Court for the Southern District of New York, the company which owns Kik Messenger app said the SEC is “twisting” the facts about its tokens called Kin, asking for an early trial date and dismissal of the complaint.
The SEC’s complaint alleges that the Toronto-based company offered unregistered securities to keep the messaging platform going.
However, Kik maintains that its public offering wasn’t a security sale and SEC’s allegations about its financial conditions
“is solely designed for misdirection, thereby prejudicing Kik and portraying it in a negative light.”
Kin Token Sale wasn’t a Hail Mary
Kin also emphasized that it did not sell Kin in a single sale, rather involved two — a pre-sale of contractual rights, pursuant to SAFTs and the second sale was to the public.
The company also pushed back against the idea that its tokens sale as a last-ditch effort to generate revenue.
A broad member said,
“I think this is a great idea. People call it a hail Mary but to me that is a longshot and I really do not think it is a long shot.”
Kik did acknowledge that in 2016 it hired an investment bank to evaluate the sale of the company but then chose to go all-in on a business model centered around a cryptocurrency instead of seeking another round of venture capital funding, however, they were not facing an imminent financial “crisis.”
“While Mr. Livingston had personally been investigating the potential for cryptocurrency-based business model since 2011, Kik had been working toward an in-app currency since it launched Kik Points in 2014.”
The Case Takes a Toll on Kin’s Price
In its affirmative defenses, Kik says it did not violate Section 5 of the Securities Act because its offer and sale of Kin in 2017 and if the phrase “investment contract” applies to Kik, it is
This has certainly taken a toll on Kin’s price that tumbled down, $0.000036 the day the lawsuit was filed to $0.000016, at press time.