The Kin Foundation has launched a “Defend Crypto” defence fund to take on the US Securities and Exchange Commission (SEC), over its 2017 initial coin offering (ICO).
“Enough is enough, we need clarity, and the only way we’re going to get clarity is if we go to court, so let’s do that.”
The campaign is being launched within the intention for the suit to ultimately result in a new Howey test for crypto tokens, to determine which tokens constitute a security versus a currency in the United States. Kin, the brainchild of Waterloo-based messaging platform Kik, said the case could set a precedent for crypto regulation. Kin has so far spent more than $5 million on the case, and is now committing another $5 million in Bitcoin, Ethereum, and Kin to continue the case.
“Kin… is setting aside $5 million with Coinbase to take [the SEC] on in court,” a statement on the Defend Crypto website reads. “But with the future of crypto on the line, [$5 million USD] might not be enough. That’s why we’re calling on others to contribute to the Defend Crypto fund.”
Kin cryptocurrency was officially launched May 2017, to fill the payments gap that Kik founder and CEO Ted Livingston called “the missing piece” to making bots successful. In December, Kik launched admin tipping, a feature that allows users to send Kin to other users in the app. The company also rolled out another feature for users to earn Kin by completing tasks and get access to premium chat themes, in June.
“When we speak to people in the industry, we need to stop living under this cloud of fear, ‘what will the SEC think?’” Livingston said to Laura Shin on the UnChained podcast. “Because we all know [crypto] is the next mega-trend of technology and by always having to ask ourselves, ‘What will the SEC think?'”
“We are giving ourselves a fundamental handicap to compete on the global stage. Enough is enough, we need clarity, and the only way we’re going to get clarity is if we go to court, so let’s do that,” he stated.
Problems between Kik, Kin, and the SEC date back years. Last November, the SEC notified Kik it was considering pursuing action against the company for violating US securities laws. This stemmed from Kik stating plans to raise $157 million CAD in August 2017 through an ICO, weeks after the SEC issued a notification that ICOs could constitute an illegal offering.
Kin was among several crypto-affiliated organizations to be sent subsequent subpoenas from the SEC. Kin affirms that its token is used as a currency, but the SEC has expressed concerns that Kin might be a security. Due to a deadline causing the SEC to announce its intention to pursue an enforcement action, it appears the commissioners either have decided recently, or will decide soon, whether or not to press on against Kin.
“I believe every ICO I’ve seen is a security,” SEC chairman Jay Clayton said, according to Coindesk. “I want to go back to separating ICOs and cryptocurrencies. ICOs that are securities offerings, we should regulate them like we regulate securities offerings.”
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