Kik Launches Scathing Rebuttal at SEC
The messaging app has filed a countersuit against the SEC, claiming the agency has deliberately twisted facts to make it seem like Kik had not complied with necessary regulations. The SEC launched an investigation into Kik and came to the conclusion that their token, Kin, was a security but did not comply with securities regulations. They further alleged company management knew they would not be able to sustain financially after posting $1.5 million in revenues and $32.3 million in expenses in 2016-17, as reported by Financial Times, August 7th, 2019.
Kik has rebutted the SECs lawsuit with blistering claims that the regulator is purposely misreporting facts and misrepresenting documents and testimony. The SEC alleged that a third party consultant told Kik that their token, Kin, was required to abide by securities regulations.
This was supposedly recommended as Kik was selling units of property they created for a specific purpose on their app. The case is slowly turning into crucial verification of whether digital tokens will need to comply with securities law.
In their 130 page response, Kik said the SEC continuously cited quotes out of context and failed to include an instance where he emphasized that Kin was a currency.
Their aggressive stance represents a company – or rather industry – that is fed up with constant regulatory scrutiny, even though it may be warranted.
As previously reported by BTCManager, Bitfinex also hit out at New York state regulators for supposedly twisting facts and cherry-picking data points. If both of these instances prove true, it is clear evidence that American regulators are tying to malign crypto business in the public eye.
After tearing down Libra, these regulators face a new potential challenge from retail behemoth Walmart. The cryptocurrency space is just starting to bloom and the issue on regulators minds is finding a way to adequately impose authority over these companies.
One would hope that this isn’t the case and that regulators will act fairly, as they would against any other business or industry.