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remember KIK forking XLM...Tsk tsk

Kik CEO Ted Livingston may have already doomed the chat app’s chances to win its high-profile legal battle with the US Securities and Exchange Commission (SEC) regarding its Kin cryptocurrency, a video uncovered by The Block suggests.

Kik’s SEC Gambit

Kik plans to fight the SEC’s charge that the Kin ICO was an illegal securities offering. | Source: Shutterstock

As CCN reported, the SEC has sent Kik a “Wells submission,” a prelude to suing the Canadian company for violating securities regulations via its nearly $100 million initial coin offering.

The letter from the SEC reads, in part:

This proposed action would allege violations of Sections 5(a) and 5(c) of the Securities Act. The recommendation may involve a civil injunctive action and may seek remedies that include a preliminary and permanent injunction, disgorgement, pre-judgment interest, and civil money penalties.

Kik has an opportunity, before the SEC files any formal litigation, to explain to the SEC why it should not investigate them. They did so on December 10.

Kik’s Wells submission implies that the SEC is going out of bounds by even considering action against Kik.

The Staff has never suggested to us that offers or sales of Kin involved any fraud or other intentional misconduct. As such, the issue in dispute is whether any sales or transfers of Kin amounted to offers or sales of a “security” – in other words, whether sales or transfers of Kin are within the scope of the Commission’s regulatory authority at all. For the reasons discussed below, we believe the proposed enforcement action would exceed the Commission’s statutory authority and, as such, would fail. The Video That Could Foil Kik’s Argument

However, in a video from 2017 uncovered by The Block, Livingston advertises the potential investment returns from the Kin token. At that point, Kin was still in the ICO stages of crypto-asset development.

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