Kik did not file a registration statement regarding its ICO with the SEC. Therefore, its digital token and trading platform are unregistered and illegal.
In a statement, Steven Peikin, Co-Director of the SEC’s Division of Enforcement, said, “By selling $100 million in securities without registering the offers or sales, we allege that Kik deprived investors of information… and prevented investors from making informed investment decisions. Companies do not face a binary choice between innovation and compliance with the federal securities laws.”
The Commission is seeking a final judgment permanently banning Kik from offering and selling digital tokens. It is also requesting the court to order the company to disgorge ill-gotten gains and to pay pre-judgment interest. Additionally, it is asking the court to impose civil monetary penalties against the company.
Kik says SEC’s lawsuit is flawed
In response to the Commission’s enforcement action, Kik CEO Ted Livingston said they “welcome the opportunity to fight for the future of crypto in the United States” They are hoping to clarify “securities laws should not be applied” to a digital currency.