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SEC Takes Kik to Court over Illegal ICO After Company Launched Its Defend Crypto Campaign

  • Alex Dovbnya
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    🥇Kik is the first major ICO issuer to spar with the SEC, which makes it a high-stake legal battle for the crypto industry👨‍💼 ⚔

SEC Takes Kik to Court over Illegal ICO After Company Launched Its Defend Crypto Campaign
Contents

The US Securities and Exchange Commission (SEC) is now suing Kik Interactive for holding an illegal ICO. The lawsuit comes after the Canada-based company kicked off a crowdfunding campaign to fight the US regulator in court.

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SEC goes after Kik

The company behind the popular messaging app failed to become profitable. The Kik app, which was primarily used by US teens, was gradually losing its core demographics.

Due to lack of any growth and big financial losses, Kik turned to the newfangled cryptocurrency industry by issuing 1 trln of Kin tokens and raising a staggering $100 mln in 2017 during one of the biggest ICOs of the year.

This success, however, didn’t sit well with the SEC. Throughout 2018, there were numerous speculations about Kik appearing in the regulator’s crosshairs until the SEC issued a Wells notice on Nov. 16.

In Tuesday’s court filing, the SEC accuses Kik of offering unregistered securities to the investors.

The offering and component sales were required to be registered with the SEC unless an exemption applied. However, neither the offering nor component sales were registered
with the SEC, and no registration exemption applied to the offering or to any of these sales.

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Kik comes prepared

As reported by U.Today, Kik recently launched the Defend Crypto Fund that is supposed to help it fight the regulatory watchdog. Kik has already spent $5 mln on an upcoming court battle, but it hopes to get more with the help of its crowdfunding effort.

According to the campaign, the SEC’s legal crackdown sets “a dangerous precedent” for the industry.

Cover image via u.today
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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with an extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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