If approved by the court, the settlement will “permanently enjoin Kik from committing future violations of the Securities Act of 1933” and require Kik to pay a penalty of $5 million.
Judge Alvin Hellerstein ruled in favor of the SEC and against Kik’s $100 million ICO, finding that the token sale was in fact an unregistered digital token offer.
Telegram and Kik both used the Simple Agreement for Future Tokens structure to raise capital for the development of their tokens.
Future entrepreneurs will be wary of proceeding on a SAFT basis, fearing that they will unintentionally be in non-compliance with SEC.
The social media platform and the financial regulator continue to spar over whether or not Kik’s Kin offering was illegal.
The financial regulator asks a federal court to issue its ruling in the case before it has run its course.
It’s been another productive week for the cryptocurrency space with activity and progress being shown across the globe.
The judge dismissed Kik’s plea, stating that it’s just a reargument of earlier facts with no new discovery
Kik argues the SEC’s definition of a security is vague, but the SEC has 70 years of jurisprudence on their hands.