SEC charges Kik ICO for issuing unregistered ICO

[rosezionjohn]

The allegations set out in the SEC’s lawsuit are not flattering to Kik. In its court filing, the agency airs the Canadian company’s dirty laundry, revealing among other things that it was losing money at the time it decided to sell digital tokens to the public. While Kik has framed its ICO as an opportunity for users to contribute to its digital platform, the SEC portrays it as a hail-mary money-grab by a desperate company. The agency also notes that Kik’s digital tokens have lost half their value since the sale.

Source http://fortune.com/2019/06/06/sec-kik-ico-cryptocurrency-lawsuit/

Oh well what do we have here? Has this info been disclosed before they started selling tokens?
Good digging by the SEC to protect more investors. I don't think Kik ICO would win this case

[ricardobs]

The cryptospace has developed faster than the regulators have created laws on how to regulate it. I reckon ICO issuers should be allowed to issue tokens as investment as long as they are not a real scams similar to Bitconneeect.

Also, citizens should also by allowed to invest their own money in anything they want as long as they do not call the regulators if they lose their investment.

[im g]https://bharatkaprakash.files.wordpress.com/2015/03/stock-market-kp.jpg[/img]

The Securities and Exchange Commission today sued Kik Interactive Inc. for conducting an illegal $100 million securities offering of digital tokens.  The SEC charges that Kik sold the tokens to U.S. investors without registering their offer and sale as required by the U.S. securities laws.

As alleged in the SEC’s complaint, Kik had lost money for years on its sole product, an online messaging application, and the company’s management predicted internally that it would run out of money in 2017.  In early 2017, the company sought to pivot to a new type of business, which it financed through the sale of one trillion digital tokens.  Kik sold its “Kin” tokens to the public, and at a discounted price to wealthy purchasers, raising more than $55 million from U.S. investors.  The complaint alleges that Kin tokens traded recently at about half of the value that public investors paid in the offering.

The complaint further alleges that Kik marketed the Kin tokens as an investment opportunity.  Kik allegedly told investors that rising demand would drive up the value of Kin, and that Kik would undertake crucial work to spur that demand, including by incorporating the tokens into its messaging app, creating a new Kin transaction service, and building a system to reward other companies that adopt Kin.  At the time Kik offered and sold the tokens, the SEC alleges these services and systems did not exist and there was nothing to purchase using Kin.  Kik also allegedly claimed that it would keep three trillion Kin tokens, Kin tokens would immediately trade on secondary markets, and Kik would profit alongside investors from the increased demand that it would foster.  The Kin offering involved securities transactions, and Kik was required to comply with the registration requirements of the U.S. securities laws.

Read in full https://www.sec.gov/news/press-release/2019-87

His time around, I am totally in support of sec for this action of theirs they have taken, this regulation is what we really need in the ICO company, and every project coming on board needs to really be scrutinized to ensure that they really will have a working product that will meet up to standard and be able to return investor’s money with interest. The only challenge with this industry is that, it is really hard to clampdown on those ICO, because majority of them operate and raise fund under this anonymous part of the crypto system, and the reason why SEC could easily identify that of KIN project is because they were well known with the project, it would have been impossible for sec to know about their operation if they had come under the auspice of another name.

[Schirer]

This is not a surprise.
In General it is annoying that SEC has not made new security laws which would be more correct regarding crypto space.
The securities law  has been the same for decades and was made when there was no cryptos..

[Grishanya1234]

It was expected since nobody wanted to recognize the cryptocurrency for a long time and now when legislative acts are already being created, it will of course be necessary to prove the origin of the means and unfortunately no project can prove anything.

[guoyu78]

There might be another reason why the SEC has acted to charge Kik on their ICO. The SEC found out that Kk was already losing money as a company before they issued their ICO. It might be a move to democratized their losses instead of democratizing opportunity for investors.

I withdraw my objection on the SEC's move in this case hehehehe. Charge them!


The allegations set out in the SEC’s lawsuit are not flattering to Kik. In its court filing, the agency airs the Canadian company’s dirty laundry, revealing among other things that it was losing money at the time it decided to sell digital tokens to the public. While Kik has framed its ICO as an opportunity for users to contribute to its digital platform, the SEC portrays it as a hail-mary money-grab by a desperate company. The agency also notes that Kik’s digital tokens have lost half their value since the sale.

Source http://fortune.com/2019/06/06/sec-kik-ico-cryptocurrency-lawsuit/

A project that is already dying before ICO, what assurance did they have before that made them believe getting more funds will revive the project, if they were not able to manage the Initial fund they had, how can they still manage this new fund, I never knew about this before I invested in their coin, because if I had known, I wouldn’t have dared it.

The coin value is not even worth it for me to have gone to pull out my fund, I can as well just give them mine for part of their court settlement. With this FUD news now, I am sure that their price will still go too low soon and maybe ended up turning to a shitcoins.

[bbc.reporter]

However, thinking again, who are we to object Kik's ICO? What if the objective of the ICO is to get more funds to have the cashflow and save the company?

The SEC can issue scam warnings, I reckon. But should the SEC not let the market set itself right?

[jostorres]

However, thinking again, who are we to object Kik's ICO? What if the objective of the ICO is to get more funds to have the cashflow and save the company?

The SEC can issue scam warnings, I reckon. But should the SEC not let the market set itself right?

And what if the objective is also for them to raise fund and disappear knowing fully well that it may become impossible to resurrect the dying project. What makes the project go down in the first instance?have they been able to spot it out and come to convince the public of how they intend to prevent future occurrences.

When Binance was hacked, what made people still stick with them was because they were able to quickly identify where the fault was from and were able to quickly allay people’s fear by letting them know what they are doing to guide against future occurrence. Kick is coming to raise ICO without letting people know exactly why they lost the first project and how they intend to prevent it from happening again if people assist with their money, but they were still fishy in raising the fund, so SEC had all the right to charge against them.