In a Medium post, Kik founder and CEO Ted Livingston confirmed that Canadians will not be able to participate in Kin’s token distribution event.
Livingston had harsh words for the Ontario Securities Commission, which he said is the reason for the decision.
“If innovation is to play an important role in Canada’s economy, we can’t afford to let this innovation go elsewhere.”
“Despite setting up Kin to have one of the most fair TDEs to date, and despite our best efforts to work with the OSC, they have failed to give us clear direction on when Canadian securities law will or, more importantly, will not apply,” Livingston writes. “Our Kin project needs to move forward, so to avoid risks arising from this uncertainty, we, a Canadian company, have decided to move forward without Canada.”
Livingston says that Canadians will be able to join Kin through the secondary market, and encouraged them to contact OSC Launchpad — which is designed to help startups navigate securities requirements — with any concerns.
“We are going through an amazing, transformative period in history — a technological revolution — and Canadian companies are in a position to lead,” Livingston writes. “If innovation is to play an important role in Canada’s economy, we can’t afford to let this innovation go elsewhere.”
As ICOs rise in popularity, there has been tension between companies and regulatory bodies in both Canada and the US; in late August, Canadian Securities Administrators released a statement urging startups to consider the law after finding that many current ICOs constitute securities.
At the time, Kik said that the statement did not change its plans to launch Kin. “We’re doing a lot of work to make sure our token is classified as a utility token, as opposed to a security (this is done via the Howey Test). Our plans have not changed in light of either ruling,” Ashley Goldstein, communications manager at Kik, told BetaKit.
In a statement sent to Bloomberg, an OSC spokesperson said it views Kik’s ICO as securities, and has been discussing options with Kik to ensure investors were protected.
Full statement from OSC on Kik ICO issue pic.twitter.com/7xWN4h5L5b
— Gerrit De Vynck (@GerritD) September 8, 2017
They also pointed to Impak Finance as an example of a Canadian ICO that complies with securities laws, and that the decision behind that approval is public.
Kik plans to raise $157 million from its token distribution event.
