ico investing

Messaging App Kik Rebutts SEC Lawsuit Over $100 Million ICO

Kik has filed a report today containing a point-by-point rebuttal of the US Securities and Exchange Commission (SEC)’s arguments, vehemently denying the core allegation that the company orchestrated an unregistered securities offering.

Kik recently released the cryptocurrency known as Kin in 2017, with a stated goal of creating a platform for app developers and end users, allowing them to transfer funds using the decentralized cryptocurrency. 

As Kik was once a trailblazer in messaging for children and teenagers, the younger audience inevitably contributed to the attraction of child predators to the app. As users were lost to the controversy and revenue subsequently declined towards the end of 2017, the SEC alleges that the company used the ICO of Kin as a last-ditch effort to revive the company and alter the winds of fate.

In the statement released earlier today, Kik alleges that the SEC manipulated facts and took Kik executives’ comments out of context, using those manipulated statements as the basis of the lawsuit. In a statement to CoinDesk, Kik CEO Ted Livingston stated that the SEC was “playing dirty” in the June lawsuit filing by trying to “simple make [Kik] look bad.” Livingston also added to the statement, remarking on how incredulous he was at the entire imbroglio:

What really surprised us is just what lengths the SEC went to twist the facts. They cut quotes and [took them out of context] and that’s something we didn’t expect from the SEC.

Kik also emphasized in the statement that it did not conduct one singular sale for the Kin token; instead, the company sold both a private SAFT (Simple Agreement for Future Tokens) and a public token sale. The SEC confused the two in its filing, which Kik alleges undermines the organization’s case against the ICO.

In a separate statement to the Wall Street Journal, Livingston spoke about the lawsuit’s potential effect on the cryptocurrency industry as a whole, expressing his relief at the fact that the lawsuit would bring much-needed clarity to cryptocurrency policies within the US:

What’s exciting to me is that this industry is finally going to get the clarity it so desperately needs.

The ruling of this case is certain to provide precedence in future considerations of SEC jurisdiction, potentially freeing future ICOs from the grasp of that particular governmental organization.

Both Kik and the SEC have met with a judge in the US Court for the Southern District of New York to work out the trial timeline, reported Livingston to CoinDesk. Kik has requested a trial in May of 2020, while the SEC allegedly requested a time later in the year.