Tokenized Platform Kik Launches $5 Million Crypto Fund Campaign to Sue the U.S. SEC
Tokenized social media platform Kik has unveiled plans for a funding initiative to raise $5 million in crypto funding for a lawsuit against the U.S. Securities and Exchange Commission (SEC).
Kin Foundation’s Ted Livingston, who is also the CEO of Kik, announced the initiative on Tuesday, May 28 as reported via the Unchained podcast.
Livingston reportedly worked on the initiative with Patrick Gibbs, a partner at U.S. law firm Cooley. The funding will be carried under the DefendCrypto fund project that Ted registered nearly a month ago.
The goal of the DefendCrypto fund, therefore, is to legally challenge SEC with the aim of getting it to provide regulatory clarity regarding the crypto sector.
According to the Unchained podcast, Kik’s fund will utilize Coinbase’s custody service to hold the crypto.
The Canadian startup’s move against the U.S. SEC relates to a 2017 initial coin offering (ICO) sale in which Kik raised $100 million from its Kin token.
But the ICO attracted SEC’s attention which proceeded to issue the startup a notice that claimed Kik’s Token Distribution Event (TDE) had violated U.S. securities laws.
In November last year, the financial regulator put in place an enforcement action, a recommendation that touched on Kik and its Kin ecosystem. The startup had a 30-day period within which to respond.
In January 2019, Kik responded by promising to fight the enforcement order and in May, the firm’s CEO revealed that the crypto startup had spent over $5 million on its negotiations with SEC.
DefendCrypto thus is a fund the Kik executive wants to use in ensuring they end the regulatory uncertainty and problems the company has faced since the ICO. By extension, these efforts will also help bring to an end the current regulatory haze surrounding the crypto industry.
According to Livingston, the uncertainty around crypto is due to SEC’s doing. He noted that lack of clarity is a huge impediment to innovators, making it difficult for them to compete against rivals across the world.
He called on the crypto community to rally behind the initiative, saying that “enough is enough,” and that what the industry needs is clarity. He added that going to court was “the only way” to have SEC offer the clarity needed.
Livingston’s call comes after similar comments were made by SEC commissioner Hester Peirce earlier in May.
The “crypto mom,” as she is known within crypto circles, raised her concerns about the apparent slow pace at which the SEC was making decisions regarding the cryptocurrency industry.
Peirce noted that this lack of movement was a hindrance to the sector.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.