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Cryptocurrencies

Messaging app Kik to fight SEC over possible ICO action

Tuesday 29 January 2019 | 12:19 PM CET

Kik, a messaging app company, has announced plans to fight a likely US Securities and Exchange Commission (SEC) enforcement action over its 2017 initial coin offering (ICO).

The chat app’s token, Kin, works like a currency and is not “an unregistered security” as believed by the SEC, company’s representatives said for The Wall Street Journal. So far, Kik raised almost USD 100 million via a sale of the token in September 2018.

Adding to the WSJ comments, Kik’s CEO said in a Medium post that Kin does not satisfy the Howey Test, the US standard for determining whether something is a security. The SEC got in touch with Kik after the launch of the ICO and most recently sent a Wells notice stating that Kik has violated securities law, the post states.

In December 2018 Kik said that its ICO involves “no fraud,” and the claims “unjustifiably target a company that made substantial efforts in good faith to comply with all existing laws and regulations when selling Kin in September 2017”, according to CoinDesk.

The next step, according to Kik’s post, is for the SEC staff to decide if they will make a recommendation to the SEC commissioners “to authorize a case against us.”

More: Link
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