Several platforms that have ventured into the world of cryptocurrencies have undoubtedly been subject to scrutiny. With lawsuits slapped across many ventures in the verse, a latest ruling proved to be unfavorable for a Canadian platform.
Kik Loses $100 Million ICO Lawsuit
Social media platforms entering the crypto industry is not new. Prominent Canadian messenger platform, Kik rolled out its own cryptocurrency, Kik token, and went on to sell $50 million in the same. This was soon followed by a public sale where the platform garnered about $49.2 million. Previously, the activities of the messaging platform weren’t under the purview of financial regulators like the Securities and Exchange Commission of the United States. However, in July 2019, the SEC went on to charge the platform for engaging in offering and selling securities without being registered.
This case had caused quite a stir in the crypto-verse and just a few months ago, both the parties involved in the case went on to file motions for summary judgment. While this could have eliminated the need for a trial in the case, the court favored the SEC by taking into consideration the regulator’s motion for summary judgment.
Elaborating on the same, U.S. Judge Alvin Hellerstein stated,
“As detailed further herein, I hold that undisputed facts show Kik offered and sold securities without a registration statement or exemption from registration, in violation of Section 5. Therefore, the SEC’s motion for summary judgment is granted, and Kik’s motion for summary judgment is denied.”
The SEC had even alleged that Kik’s crypto venture was an easy money-making tactic used to recover the losses that they endured due to the performance of the messenger platform. While Kik’s CEO and founder, Ted Livingston had previously asserted that the platform would give a tough fight in the case, the latest news would pose as a huge set back for the firm.
Furthermore, the court ordered that Kik was to submit the penalty by 20 October 2020. The Judge added,
“By October 20, 2020, the parties shall jointly submit a proposed judgment for injunctive and monetary relief. If they cannot agree on a proposed judgment, they should note their differences in a single document, supported by separate statements in a single letter, to be submitted by the same date, October 20, 2020.”