05 Jun 2019
The U.S. Securities and Exchange Commission sued social media company Kik Interactive Inc on Tuesday, alleging it conducted an illegal $100 million securities offering of digital tokens in 2017.
The move sets up what could be a high-profile legal fight over the U.S. government’s treatment of cryptocurrencies.
Kik, which provides a global chat platform under the same name, sold the “kin” tokens to investors without registering the offering under U.S. securities laws and deprived investors of information, the regulator said.
“Companies do not face a binary choice between innovation and compliance with the federal securities laws,” said Steven Peikin, co-director of the SEC’s enforcement division.
Kik’s online fundraiser was one of the largest ICOs that took place in 2017, amid a global cryptocurrency issuance frenzy. Backed in some cases by legal opinions, companies such as Canada-based Kik, said they believe the “tokens” they were issuing were not securities.
By Pete Schroeder, Reuters, 4 June 2019
Read more at Reuters
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