SEC sees $5M victory in case against Kik
The outlook is grim for the Canadian messaging app as it loses $5 million over its ICO for Kin tokens.
On Wednesday, the U.S. Securities and Exchange Commission announced the end of its lawsuit against Kik Interactive.
The Canadian messenger app fell afoul of the U.S. regulator for failing to treat its sale of KIN tokens as a securities offering. A district judge confirmed the SEC’s view at the end of September, but only today did the court see the final judgment.
As a result of today’s judgment, Kik will need to pay the SEC $5 million in penalties and keep the commission posted as to any capital raises for the next three years. Given that Kik was a firm in financial dire straits before its initial coin offering (ICO) for KIN, it’s an open question as to whether it will survive.
Alongside the SEC’s victory over Telegram in a similar ruling, many commentators have seen recent court decisions as putting an end to end to Simple Agreement for Future Token contracts that were the legal framework for a number of the largest ICOs of recent years.
