Messaging app Kik, which had launched a cryptocurrency token called Kin, has announced that it is launching a crypto crowdfunding campaign called Defend Crypto. 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, news portal CoinDesk reported.
The campaign states, “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?”
It further added that, even though 300,000 people use Kin as currency, the SEC thought that Kin was a security. It said, “After months of trying to find a reasonable solution, Kin has been unable to reach a settlement that wouldn’t severely impact the Kin project and everyone in the space. So Kin is going to take on the SEC in court to make sure there is a foundation for innovation going forward.”
Now, Circle, the company that owns the cryptocurrency exchange, Poloniex has said that it supports the movement. In a tweet the company said, “We’ve been vocal about the need for regulatory clarity so crypto can flourish in the United States and fortunately we’re not alone in this fight.Circle & @Poloniex support and applaud @kin_foundation’s effort’s to #defendcrypto.”
We urge lawmakers to stop applying laws written in the 20th century to technologies created in the 21st and commend all others fighting for our industry.
Read more on our views on the US regulatory landscape here. https://t.co/sTyRrlidDt
— Circle (@circlepay) May 28, 2019
This development was not out of the blue. Earlier this year, the SEC had issued a Wells notice, signed by Robert Cohen, Chief of the Cyber Unity of the Division of Enforcement. It stated that Kin, a cryptocurrency developed by Kik, might face civil injunctive action, a permanent injunction, disgorgement, prejudgment injury, and civil money penalties for violating Sections 5(a) and 5(c) of the Securities Act of 1933.
At the time, Kin had responded saying, “For the reasons discussed in more detail below, the Staff’s proposed enforcement action against Kik and the Kin Foundation will likewise fail any rigorous analysis of whether offers and sales of Kin amounted to offers or sales of a “security” within the scope of Section 5 of the ’33 Act. Kin was designed, marketed, and offered as a currency to be used as a medium of exchange within a new digital economy. This takes it outside the statutory definition of a “security” under the federal securities laws, and gives it a consumptive use that is inconsistent with an investment purpose. Simply put, Kik did not offer or promote Kin as a passive investment opportunity.”
It had also added that terms of the sale were flatly inconsistent with an “investment
contract”, as Kik had transferred the ownership of Kin to purchasers who had full control of their tokens.
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