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The messaging app Kik is embroiled in a controversy with U.S. regulators over its unregistered $100M ICO. The trial will likely take place as soon as May 2020 and Kik is prepared to go all the way to defend themselves.
In June, the SEC sued Kik for what it considered to be an illegal STO held in 2017 which raised around $100M at the time. The SEC alleges that Kik’s offering of KIN tokens was marketed as an investment opportunity, failed to register with U.S. securities laws, and ultimately took advantage of investors. The SEC also claims that Kik was using the ICO to cover up its losses, as a flagrant ‘cash grab.’
Since then, Kik has been on the offense—and has even been ramping up its attack against the SEC in preparation of its court case. The company even shut down its famous messaging app to focus its efforts on fighting the regulatory agency.
According to Kik CEO Livingston, the strategy now is threefold:
1. We will shut down the Kik app
2. We will reduce our headcount to an elite 19 person team
3. We will focus on one thing: converting Kin users into Kin buyers
According to a recent report by Global News, Livingston told an audience at the Elevate Conference in Toronto on Sept 25. that they would fight this with every dollar they have.
“We have to keep going. Until that’s it, we don’t have a dollar left, a person left. We will keep going no matter how hard it is.”
Although Kik admits that it ‘underestimated’ the SEC’s aggressiveness initially, they are not taking up this up as a cause for the entire cryptocurrency industry. Some, however, have criticized the company and are distancing themselves. Coinbase, for one, supported Kik but has since rescinded its support. Others claim that Kik did use its KIN tokens as a blatant way to make-up for losses.
Regardless, this sage will continue to heat up until the court case sometime in May 2020.
Does Kik have any chance of winning this case? Will this establish an important precedent in the industry? Let us know your thoughts below in the comments.