From: RegTech Analyst
Chat app developer Kik Interactive has entered into a settlement with the Securities and Exchange Commission for the unlawful sale tokens in 2017 and has agreed to pay $5m in fines.
The original SEC complaint, filed filed in the US District Court for the Southern District of New York in 2019, alleged that Kik Interactive had sold digital asset securities to US investors without registering their offer and sale as required by the US securities laws.
The court agreed with the complaint, saying that that the Kik’s sale Kin tokens was sales of investment contracts, which 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.
“This has been a long, expensive, and public battle between Kik and the SEC,” said Kik Interactive in a statement. “Although we respectfully disagree with Judge Hellerstein’s analysis in his ruling and were prepared to pursue an appeal, the SEC offered settlement terms that allow us to put this behind us and focus on our mission. We look forward to an exciting future for the Kin Ecosystem and the millions of mainstream consumers who earn and spend Kin every month.”
Back in September 2019, we reported that Kik Interactive had shut down its messaging services to focus on the suit.
Kristina Littman, chief of the SEC Enforcement Division’s Cyber Unit, commented,
“Issuers seeking to use the public markets to capitalise their businesses may not evade the registration requirements of the federal securities laws. The court’s decision recognised that Kik was engaged in a single, illegal offering of securities.”
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