Messaging app, Kik alleged that the Securities and Exchange Commission (SEC) twisted facts and took comments out of context in the latter’s lawsuit against the former for its 2017 token sale.
News portal Coindesk stated that in a 130-page filing Wednesday, Kik laid out a paragraph-by-paragraph rebuttal of the SEC’s arguments and flatly denied its core allegation that the company conducted an unregistered securities offering.
Earlier in May this year, the messaging app announced a defend campaign against the SEC. The campaign was officially announced by Kik founder and CEO Ted Livingston and Patrick Gibbs, a partner at law firm Cooley LLP, on the UnChained Podcast Tuesday. The campaign had said, “In January 2019, Kin came out publicly to share what has been going on behind the scenes with the Securities and Exchange Commission (SEC). This has been a burden for not just Kin, but many others in the space who are optimizing for regulation before innovation. Everyone is always asking “what will the SEC think?” instead of “what is best for consumers?”
Following that in June, the SEC launched a legal missive against messaging app Kik, beating them to the punch. The regulatory body sued the app for conducting an illegal $100 million securities offering of digital tokens. The SEC alleged that Kik sold the tokens to U.S. investors without registering their offer and sale as required by the U.S. securities laws.
At the time, the press release from the SEC said that Kik sold its “Kin” tokens to the public, and at a discounted price to wealthy purchasers, raising more than $55 million from U.S. investors. The complaint alleged that Kin tokens traded recently at about half of the value that public investors paid in the offering.
The Chief Executive Officer (CEO) told the news portal Coindesk, “What really surprised us is just what lengths the SEC went to twist the facts. They cut quotes and [took them out of context] and that’s something we didn’t expect from the SEC.”
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