Kik ICO Judged Illegal

Kik ICO Judged Illegal 1024 500 Crypto Rand Group
kik illegal

The U.S. Court rules in favor of the SEC against Canadian publisher Kik Interactive. The SEC has ruled that Kik ‘s $100 million ICO in 2017 is a violation of federal securities laws and therefore, illegal.

Kik’s CEO said he was prepared to go bankrupt to fight the SEC. He may indeed have to do so, but without winning. The U.S. justice system is inflicting a serious setback on him.

The judgment inevitably leads the Canadian company, issuer of the KIN token, to the payment of a financial penalty. At issue was the two-part issue in 2017 of its tokens for a total amount of approximately $100 million.

An ICO that is similar to a securities issue

The SEC, the US stock exchange regulator, accuses it of selling securities outside the legal framework. A position contradicted by Kik, for whom his chips are not securities but commodities.

Justice Kellerstein, however, accepts the SEC’s arguments. According to the judge, the sale of tokens in 2017 does meet the definition of a securities issue under the Howey test. Primary ground? Investors had a reasonable expectation of profit.

“In public statements and at public events promoting Kin, Kik extolled Kin’s profit-making potential. Kik’s CEO explained the role of supply and demand in driving the value of Kin: Kik was offering only a limited supply of Kin, so as demand increased, the value of Kin would increase, and early purchasers would have the opportunity to earn a profit.” the judge argued.

A judgment with no impact on the Kin token

In his order, the U.S. Judge now requires the SEC and Kik to reach an agreement. Not in the sense of the Canadian publisher, however. Both parties must jointly submit a draft judgment by October 20. This will be accompanied by an injunction and financial compensation.

However, Kik does not intend to give up yet. In a statement of claim, the company “continues to consider Kin’s public sale to be that of a functional currency and not a sale of securities. »

“Although this is a setback for Kik, this decision has no impact on the Kin Foundation, the Kin token, and the growing ecosystem of developers making Kin the most widely used crypto-money for ordinary consumers,” she adds.

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