Kik Interactive Inc., the Canadian messaging app company, is allegedly planning to take the SEC to court over a potential enforcement action. The aforementioned action by SEC is against Kik’s 2017 Initial Coin Offering of the Waterloo, Ontario-based tech company’s proprietary cryptocurrency, Kin.
As per a crypto media outlet CCN, a Kik representative says that the stakes are high for the entire cryptocurrency and digital asset ecosystem. He adds that they are unsure of how the Commission will vote. However, they believe that any enforcement action against Kik, Kin, and the foundation would be damaging to the entire digital asset and crypto industry.
Ted Livingston, CEO of Kik, told the Wall Street Journal about his company’s upcoming legal battle with the Washington D.C. regulatory giant. He wrote more about it on his Medium blog.
It is to be noted that this development comes after SEC Chair Jay Clayton said that he believes every ICO he has seen is security. That includes just about every cryptocurrency, including Ethereum, as per him. He added that this is the thing that everyone in the industry is dealing with, but nobody wants to talk about. As per him, for all the stakeholders to be able to continue hiring, innovating, and competing, we need to change that.
Notably, this situation is not unique to Kik. Interestingly, there are numerous projects at a similar point with the SEC. According to Livingston, they all believe that this industry needs regulation, but they also believe that this is not the way to get it.
In Kik Interactive’s official Wells Response to the SEC, Kick mentions that the Staff’s proposed enforcement action against the Kin Foundation and Kik will similarly not succeed any rigorous analysis of whether offers and sales of Kin amounted to offers or sales of a “security” within the scope of Section 5 of the ’33 Act. Kin was designed, offered, and marketed as a currency to be used as a standard of exchange within a new digital economy.