In preparation for what many believe would be a landmark case in the history of the U.S crypto ecosystem, the Blockchain Association announced Friday that it would now take over the Defend Crypto Fund originally set up by legally troubled messaging startup, KIK Interactive.
The U.S Blockchain Association (USBA) is a non-profit organization committed to advancing public policy for the growth of the country’s crypto ecosystem.
In the announcement today, the USBA revealed that it will now manage the residual $2 million fund which KIK raised from the crypto community as part of its efforts to take the U.S Securities and Exchanges Commission (SEC) to court in the coming months. The funds would also be used to help other legal startups facing a situation similar to KIK's.
KIK interactive as we reported last month seeded the fund with $5 million after it became apparent that the U.S SEC was bent on enforcing action against the Canada-based company that raised nearly $100 million in a 2017 ICO.
While the U.S SEC in its lawsuit claims that KIK’s token sale violated security laws, the startup basically argues that it did not go against any rules since they already had users on the messaging platform who bought the cryptocurrencies for transactional purposes.
With that heated debate expected to take a long time to reach its climax, it is apparent that KIK would at least have to spend a lot of money in the legal process, a battle that the startup took it consideration before setting aside a $5 million fund.
Now, with the residual $2 million raised from the crypto community left in the custody of the USBA, the non-profit organization would be in charge of determining “the best way to structure the fund, governance policies, how to raise additional funding, and criteria for determining when to use the funds.”
The USBA in its announcement also expressed a conviction that the KIK case would eventually lead to the arrival regulatory clarity and allow for responsible innovation.