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The Kik and SEC combat finally ends

The SEC had penalized Kik for launched an initial coin offering that allegedly hasn’t gone through the appropriate registration protocols in the agency. Kik is now required to fork out a $5M fee.

The SEC and Kik Have Finally Reached a Settlement

The SEC had sworn up and down in the past few years that would not go after all the token offerings that have in some way or another gone against the rules. It has been advised that many crypto ventures offering securities that should they refuse to properly register their tokens, they can imagine a clampdown of sorts followed by monetary penalties and a further disciplinary action that can probably affect the future in the world of token selling.

The SEC claimed that Kik has broken several securities laws thru offering what is now known as the Kin token, which is worth only about $0.000011. The case versus Kik had been going on since 2019. When the US District Court of the Southern District of New York entered a final judgment in contradiction of the firm and the token that the SEC claims that was offered illegally to the traders.

ICOs have lost their stamina in recent years with how fraudulent many of them have been and how much money had been lost. At some point, they were considered as the ultimate method for raising capital, over time, several investors have turned away from the ICOs in a fear that all their money could wind up disappearing for good.

The SEC said that Kik had been holding its ICO in the year 2017 during a time when bitcoin was skyrocketing. Additionally, the government agency claimed that Kik knew that it would not raise money in the same year. All in all, it is believed that more than $50M has been earned through the venture.

SEC leaders explained in a statement:

“[The] court granted the SEC’S motion for summary judgment on September 30, 2020, finding that undisputed facts established that Kik’s sales of ‘Kin’ tokens were sales of investment contracts, and therefore of securities and that Kik violated the federal securities laws when it conducted an unregistered offering of securities that did not qualify for an exception from registration requirements.”

Moving Forward…

Apart from being forced into paying money, Kin must also inform the SEC of every time it plans to sell the digital assets in the next three years. The company had publicized the following in reply to the SEC’s judgment on the matter:

It has been a long, expensive, and broadcasted battle between Kik and SEC. Though it has been respectfully disagreeing with Judge Hellerstein’s analysis in ruling and were prepared to pursue an application, the SEC had offered settlement terms that are allowed to put it behind and focus on the mission. An exciting future for the Kin ecosystem has been looked forward to and the millions of mainstream consumers who will earn and spend Kin each month.

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