Kik vs. SEC Still On-Going: How Did the Situation Change so Far?

The crypto space continues to struggle with reaching mainstream adoption, receiving proper regulations, and encouraging institutional investors to start joining in greater numbers. While there are still quite a few reasons for this, one particular situation stands out and might end up being more damaging for the sector than many have previously believed.

The Battle Continues: Kik and Kin Refuse to Stand Down

The issue in question in the US SEC's lawsuit against Kik, Canadian messaging startup. The startup decided to create its own cryptocurrency a few years ago, known as Kin. Kin saw its token sale in 2017, during the crypto bull run, when ICOs were popping up left and right. Its ICO was rather successful, raising over $100 million. However, the problem lies in the fact that the US regulator, the SEC, believes that Kin is security.

However, it was not registered with the SEC, nor is it compliant with security regulations, hence the lawsuit. Now, the regulator demands that Kik give all of the raised money back, and with interest, at that. Meanwhile, Kik's CEO and founder, Ted Livingston, refuses to cooperate, believing that he and his company still have a stronger case.

Winning against the SEC would cast a shade on all of the regulator's previous statements regarding ICOs, tokens being securities, and alike. Everything would need to be reexamined, and many believe that the crypto space would have won an important battle. But, as things are now, that is very unlikely to happen. In fact, it is more likely that the SEC is going to win the case, which would mean the end for Kin, Kik, as well as numerous other projects that are struggling against the SEC in a similar fashion.

Indeed, Kik and Kin are already experiencing difficulties due to the lawsuit, as Ted Livingston himself admitted during a recent AMA session on Reddit. He stated that the company cannot find new partners and that it even came close to entering a major partnership with an undisclosed company. However, when the company realized that Kik is facing a lawsuit from the SEC, they changed their mind regarding the partnership.

Such partnerships would help Kik with its case in proving that Kin is a part of a decentralized network, but it cannot get it due to the lawsuit, which it cannot defeat without the partnership, and the circle continues. Of course, Kik and Kin still have supporters, but not enough to win against the SEC. Further, Kin is supposedly only meant to be used within the app, but it is also attempting to get listed on different exchanges, which makes no sense.

ICO Law Experts Claims that Kik doesn’t Stand a Chance

Many have urged Kik's founder to give up on fighting the SEC, especially Josh Lawler — a partner at ICO law specialists Zuber Lawler. Lawler recently published a post on his Medium account, stating that Kik does not have a strong enough case and that the continuation of the struggle can only cause further harm to the crypto sector.

Furthermore, he points out that the way Kin was marketed clearly points at it being security. Back in 2017, Livingston himself appeared on a video at a San Francisco-based Bitcoin Meetup, promising that those who invest into Kin will make a lot of money. The company's marketing material also promised that Kin would appear in exchanges, only to start claiming that it was never intended to be used outside of its app, as mentioned.

Lawler recognizes that the crypto sector needs more lenient regulations when it comes to ICOs, crypto startups, and cryptocurrencies themselves. However, he claims that based on the case's history, and the history of the crypto sector — the court will rule against Kik. Not only that, but it will also damage other projects by tightening the Howey Test noose around their necks.

These projects might even comply with the securities laws, but it would hardly matter if the regulations become harsher in order to avoid dealing with another project like Kik. Lawler ended his post with a direct message to Livingston, pleading that he stands down.

Get Free Email Updates!

*Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

Ali Raza
Ali Raza
A freelance journalist, with experience in web journalism and marketing. Ali holds a master degree in finance and enjoys writing about cryptocurrencies and fintech. Ali's work has been published on a number of cryptocurrency publications.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

LEAVE A REPLY

Please enter your comment!
Please enter your name here

3,467FansLike
2,795FollowersFollow
4,191FollowersFollow

Live Bitcoin Price & Latest BTC Charts

Today's Latest Crypto News

Ethereum Layer 2 Solution, SKALE Network, Launches Its Mainnet Phase One; Staking & Bounties Start in Early Q3

SKALE - an open-source scaling solution backed by Gemini exchange founders Winklevoss brothers for scaling the Ethereum network - has started to roll out...

Pundi X Integrates PayPal into Point-of-Sale Device, XPOS; Users Can Buy & Sell Crypto Seamlessly

Pundi X, a blockchain firm based in Singapore, has integrated its point-of-solution (PoS) device, XPOS, with PayPal, according to a medium post on June...

Crypto Mining GPU Manufacturer, NVidia Petitions Court to Toss Out $1 Billion Class Action

NVidia has petitioned the California court to dismiss the class action suit made by its investors. The lawsuit against the firm’s top brass alleges that...

Hacker Extort 116.4 Bitcoin from University of California San Francisco (UCSF)

The University of California San Francisco (UCSF) paid a ransom of $1.14 million in Bitcoin after a ransomware attack earlier this month, reported BBC...

Targeting Institutional Investors: SBI Holdings Is Buying a Minority Stake in B2C2 Exchange

A unit of Japanese financial conglomerate SBI Holdings, SBI Financial Services is buying a minority stake in London-based crypto market maker B2C2 for $30...

BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.

Start Using Crypto Today