Yesterday the US Securities and Exchange Commission (SEC) announced that it sued Kik Interactive Inc. for an allegedly illegal initial coin offering (ICO). This 2017 ICO raised $100 million for the messaging app firm via its blockchain based cryptocurrency Kin. The SEC claims this money was raised unlawfully.
Yesterday’s
announcement from the SEC equates Kin tokens with securities. In their eyes, the ICO should have been registered. Securities also must be traded on SEC authorized exchanges in the US, but most cryptocurrencies are not.
The charges allege that Canada based Kik sold tokens as more of an investment than a currency to be used in a blockchain based system. Though Kik offered services via its app which incorporated Kin, the SEC alleges that such services did not exist when the ICO took place, making it a sale of securities.
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