In what is turning out to be an exciting showdown, KiK Interactive Inc., a Canada-based messaging platform that raised $100 million in an ICO back in 2017 has revealed plans to take the U.S Securities and Exchanges Commission (SEC) to court.
The startup unveiled earlier this week a new fund tagged “Defend Crypto” mentioning that it has set aside a $5 million fund to continues its ongoing legal battle with the regulators. However, KiK noted that “with the future of crypto on the line, $5 Million might not be enough.”
At the time of writing, the “DefendCrypto” page has received an extra $292,896 in funding and would likely attract more in the coming days.
The KiK vs. SEC Story
As Stmarket.co reported in January, Kik Interactive received a notice of intention to enforce actions from the U.S SEC.
The regulators, as in the previous cases argued that Kik’s token sales in 2017 breached U.S “securities law” since the startup did not register the issuance as a “securities offering” with the Commission.
Upon receiving the notice, Kik said in its official reply that Kin tokens which they sold during the ICO is a currency and not a “security,” outlining several areas in which the token did not fit in with the Howey Test which the U.S SEC used to define the status of such offering.
It seems, however, that Kin’s explanations did not go down well with the Commission and now they are going ahead to announce an enforcement action against the startup, hence the latest decision to raise funds from the cryptocurrency community.