Posted 2 years ago | by Ben Armstrong
SEC "Twists" Truth About KIN
While Facebook is preparing to take on seemingly the entire U.S. Government over the launch of its stablecoin Libra, another messaging giant is already facing a tough battle. The company behind the Kik messaging app, Kik Interactive, has written a 130 page response to the Securities & Exchange Commission lawsuit that was filed against it. The lawsuit claims that Kik's $100M KIN ICO was illegal. Kik refutes that claim.
The battle basically boils down to whether or not KIN is a utility token. This could be a very important lawsuit for any crypto project that highlights a utility token that was sold as an ICO. The SEC does not believe that KIN is truly a utility token. They make the claim that the token was strictly an investment opportunity. Kik sticks by their claim that KIN is an in-app token that users will buy games & other digital products with.
The SEC goes so far as to assert that Kik actually used the token sale to generate enough revenue for the Kik Messenger to survive. The SEC alleges that Kik Interactive had been running out of money with a losing business model. For all intents and purposes, the main allegation is that Kik used the KIN ICO to keep from going out of business. Those are some pretty stiff allegations.
In Kik's response, they say that the SEC is trying to use those allegations to paint Kik as a struggling company and to put them in a bad light in preparations for the lawsuit.
It's actually very difficult to know which side is correct here because they are caught in a back and forth battle where they seem to be one upping each other and trading jabs in the court of public opinion. Kik's bold game plan here is a huge gamble that may have huge ripple effects on the entire cryptocurrency world. It's hard to take on the U.S. Government and come out a winner.
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