Let’s Take A Closer Look At The SECs Recent Lawsuit Against KiK’s Kin Cryptocurrency ICO
Let’s Take a Closer Look at the SECs Recent Lawsuit Against KiK…
- Kik’s legal counsel is confident that the case put forth by the US Securities and Exchange Commission will be dismissed due to their lack of substantial evidence.
- The SEC claims that KiK’s recent ICO event was comparable to an unregistered securities sale and thus the firm was obliged to register the offering with the regulatory body before going public with it.
For those of our readers who may not be up to speed with some of the latest happenings from within the world of crypto-based finance, the U.S. Securities and Exchange Commission recently filed a lawsuit against KiK — a popular messaging app that has 300 million registered users — claiming that the firm’s $100 million ICO was essentially an “unregistered securities sale”.
As per an official complaint filed by the SEC this past Tuesday, Kik has violated a host of federal securities law by “not registering its kin token sale” with the regulatory agency. In regards to the matter, Eileen Lyon — who is serving as Kik’s general counsel — was recently quoted as saying that a number of the SECs allegations are untrue and have been based upon a series of inaccurate assumptions.
In response to the SECs latest filing, Kik CEO — Ted Livingston — stated that the lawsuit had been coming for quite some time now and that he “welcomed the opportunity to fight for the future of crypto in the United States”.
In regards to the matter he then went on to add:
“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. Kin is being used by more people in more apps every day, and come trial, Kin may be the most widely used cryptocurrency in the world. While the SEC's actions are a challenge to overcome, they won't affect the use, transferability and characterization of Kin, and we expect momentum in the Kin Ecosystem to only continue to grow.”
- Lyon too is of the opinion that the SECs complaint is intrinsically flawed since it automatically assumes, incorrectly, that the potential increase in the value of an asset “is the same as offering or promising profits solely from the efforts of another”.
- Kik’s legal team is confident that they will come out with the upper hand in the case — since the SECs assumptions stretch the Howey test way beyond its current definition.
- Lastly, it appears as though the SECs lawsuit presents a highly biased view of how Kik carried out its 2017 pre-sale and token distribution event.
More On The Matter
As per Drew Hinkes, a well respected attorney who has been working within the crypto space since the turn of the decade, the SEC’s case is quite strong since it is backed by a host of well researched information that has be procured from YouTube, Slack and Twitter.
On the matter, Hinkes further added:
“The SEC has a ton of documentary evidence and a ton of facts. Seems like there’s a lot of strong facts in the SEC’s favor … now the issuer gets to argue the law.”
As things stand, it appears as though both Kik and the US SEC have strong cases to back-up their claims. It now remains to be seen what the future has in store for the above mentioned parties.