Between SEC and Kik, the ICO of discord

The positions of the American stock exchange regulator, the DRY, and of Kik, the token editor KIN, remain irreconcilable. If Kik’s CEO has said he’s ready to go broke to fight the SEC, the company is looking for a quick resolution to the dispute.

The $ 100 million ICO from the Canadian publisher Kik do not pass. And the DRY is determined to get the company convicted. In an application for an interlocutory judgment filed in a New York court, the financial markets authority challenges Kik's line of defense.

For the regulator, the crypto actor simply failed to demonstrate the legitimacy of the reasons for which he did not register his 2017 token sale. Arguments of course strongly contradicted by Kik.

Not an ICO, but two separate token sales

The company also hopes to rally justice to its position and escape a trial. She also filed an application for a summary judgment. There is no doubt that the US securities laws were followed to the letter.

Kik underlines that two token sales were made, the first to accredited investors in order to finance the development of the KIN ecosystem. As for the second, it was a distribution of tokens to the public, with no commitment in terms of return on investment.

In his line of defense, Kik believes that pre-sale to investors was exempt. The second was not a sale of returnable securities.

KIN? Not a title, but commodities

In addition, the KIN is a cryptocurrency. However, the Commodity Futures Trading Commission (CFTC) and the American tax authorities (IRS) classify these assets as commodities. Clearly, the SEC is not competent to regulate this emission of tokens KIN.

The SEC is asking this Court to devote an unprecedented and considerable extension of the SEC's regulatory power, ”denounces the Canadian firm in its summary proceedings. What certainly make strangling the lawyers of the regulator.

The latter categorically refutes, observing in particular the absence of a real border between his presale to investors and the issuance of tokens to the public, the former having sold without restriction the tokens freshly acquired on the open market.

The decision to resolve this disagreement in a real trial is now up to the judge. Coindesk recalls, however, that it is common for the defense, Kik here, to hire a referee, even if the probabilities of success are unfavorable.