TECH

US Government sues Kik for unauthorized offer of crypto-coins

The Securities and Exchange Commission is suing Kik for an unauthorized offer of crypto coins that raised $ 100 million for the company. According to the regulatory body, which cited this as its major action of the type, the entire process was done without proper registration and approval, something that is illegal under US law.
The case came in 2017, when Kik launched Kin, its own crypto-currency that would be delivered to potential investors instead of the company's traditional stock. The offer was of income above the ones obtained in the Stock Exchange, mainly in the face of the reality of a company that began to lose users, but via the financial contribution a way to reerguer and to invest in new resources to recover the interest of the people.
In the lawsuit, the SEC accuses Kik not only of conducting a public tender offer without regulatory endorsement but also asserts that the company acted erratically by failing to disclose the actual state of its finances to investors. In addition, the company accuses the company of having acted in bad faith, since it knew that its ICO would be considered as such, but nevertheless chose not to register with the authorities.
The Canadian company's response came in the form of the DefendCrypto.org campaign, which accuses the SEC of trying to shape the future of crypto-coins and get in the way of innovation. Kik said it had set aside $ 5 million in Kins to fight a lawsuit it knew was on its way due to its refusal to meet regulatory standards, but said it believed that even that amount might not be enough.
Therefore, Kik opened an address for donations of users interested in combating the system, asking for contributions to be made, also, in crypto-coins. At the moment this report is written, the campaign of collective financing for payment of eventual penalties already has more than $ 4.4 million collected, mostly in ethers and bitcoins.
The SEC did not disclose details of the lawsuit but confirmed that it should fine Kik, whose figures have not yet been disclosed, and work to ensure that the company meets its regulatory obligations. In response to the company's crowdfunding campaign, commission execution co-director Steven Peikin denied that there was an attempt to shape the market and said companies could not opt ​​for innovation while ignoring compliance.


Source: Bloomberg, DefendCrypto