SEC, Kik Continue Court Clash Over $100M Kin Token Sale

The U.S. Securities and Exchange Commission (SEC) and Kik Interactive are both doubling down on their desire for a speedy resolution to a nine-month-old legal case over whether Kik’s 2017 initial coin offering was a securities sale. 

The SEC and Kik both filed oppositions to the other party’s motions for summary judgement late Friday, reiterating their arguments in the case and their respective takes on whether statements collected during the court battle to date are complete and accurate. 

In the SEC’s view, kin would have no value if it wasn’t for Kik’s efforts to “champion” the ecosystem, writing, “at no point during its marketing campaign did Kik identify any specific good or service that could be purchased with kin.” 

The SEC first filed suit against Kik in June 2019, months after letting the startup know that it was investigating whether the $100 million kin token sale was an unregistered offering of securities. 

In its filing Friday, the regulator said “all persons and entities that bought Kin through the $100 million offering (‘Kin investors’) (1) made an investment of money (2) in a common venture (3) with a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others,” referring to the three-pronged Howey Test (the Supreme Court-based evaluation of whether something is a security or not).

“Kik does not dispute that it conducted the 2017 offering through interstate commerce, or that it offered and sold securities to the SAFT participants,” the SEC said. “Rather, Kik now seeks summary judgment on the sole grounds that (A) it did not offer and sell investment contracts to the public investors, and (B) the portion of its offering to the SAFT participants qualified for an exemption from registration.”

The SEC believes that these grounds are insufficient. The regulator also filed a number of exhibits on Friday to bolster its case.

According to one of these exhibits, Kik began 2018…

Source Link