Kik Interactive, the social messaging platform behind the cryptocurrency, KIN is about to fight against the ordering of the Securities and Exchange Commission (SEC). The Canadian company claims that its digital asset which the financial regulators have classified as “securities” is a “utility token”, according to a media outlet’s report on January 27.
Kik to Fight Against SEC in Court
Per the report, the Ontario-based tech company is about to fight against the SEC in court for categorizing KIN as securities which have to be registered under the U.S. laws. According to Ted Livingston, Kik’s CEO, its digital asset is a utility token because users are not led to believe that they can be used to make investments.
On the other hand, the CEO noted that there is still a potential for users to make profits while using the virtual currency. Therefore, Livingston said KIN should not be subject to the same registration imposed on assets such as bonds, treasury stock, security future, etc. because KIN is a currency that can be exchanged for goods and services.
KIN Cryptocurrency Targeted at the KIK Social Messaging Service
KIN, the asset in question is targeted at Kik, a social messaging app for Android and iOs smartphones. The virtual currency is used in Kik to reward admins and moderators. In the same vein, users of the platform can earn the token through surveys and publishing premium content. They can get rewards from 30 other apps on Google Play and iOS App stores.
Reports also reveal that during the digital asset’s ICO, about $100 Million was raised which is quite a big deal for a token sale event that held in 2017. However, like many others in the industry which have been targeted by the SEC, Kik is about to fight back. This may likely impact on the future of other ICOs, and the crypto industry.
Basis Discontinues Launch Due to SEC’s Registration Demand
Basis stable coin project, for instance, an ICO which raised $133 million had to be discontinued in December 2018, and the developers attributed this to the SEC’s actions. Here, Basis was categorized as securities which have to be registered under the U.S. laws. The same is now the case of Kik who has decided neither to fold nor adhere to the SEC’s terms.
On November 9, BTCNN also reported that Zachary Coburn, Etherdelta’s CEO had been fined by the SEC for operating an unregistered exchange where several securities are traded. The CEO complied with the financial regulators by registering the exchange and agreeing to pay $300,000 in disgorgement, $75,000 penalty, and $13,000 in prejudgment interest.