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By RTTNews Staff Writer | Published: 10/23/2020 9:59 AM ET
Messaging startup Kik Interactive reached a $5 million settlement with the U.S. Securities and Exchange Commission to resolve charges of running an unregistered offering of digital "Kin" tokens in 2017 that violated the federal securities laws.
The SEC had filed a complaint with the U.S. District Court for the Southern District of New York on June 4, 2019. The court approved the negotiated settlement between Kik and the SEC. The court's decision recognized that Kik was engaged in a single, illegal offering of securities.
According to the complaint, the SEC alleged that Kik sold digital asset securities to U.S. investors without registering their offer and sale as required by the U.S. securities laws.
The court found 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 any exemption from registration requirements. The court further found that Kik's private and public token sales were a single integrated offering.
Apart from the monetary settlement, the final judgment permanently enjoins Kik from violating the registration provisions. Kik is further required, for the next three years, to provide notice to the SEC before engaging in enumerated future issuances, offers, sales, and transfers of digital assets.
Kik, which was founded by CEO Ted Livingston, in September 2017 created its very own native cryptocurrency known as Kin based on the Ethereum blockchain. It was launched as an ERC-20 token for the initial sale and distribution of tokens. The company had raised around $98 million in its ICO at the end of 2017.
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Article written by an RTT News Staff Writer, and posted on the RTT News.com website.
Article reposted on Markethive by Jeffrey Sloe
