The Kin Foundation, the organization behind Kik’s digital currency, has launched an initiative called DefendCrypto.org with a fund of $5 million for a legal battle with the Securities and Exchange Commission (SEC).
Revealed by Ted Livingston, founder and CEO of the Canadian messaging platform, during a crypto-focused podcast named Unchained, the organization is seeking a clear definition of a digital token falling under the category of securities.
“When we speak to people in the industry, we need to stop living under this cloud of fear, what will the SEC think? What will the SEC think? Because we all know [crypto] is the next mega-trend of technology and by always having to ask ourselves, ‘What will the SEC think?’ we are giving ourselves a fundamental handicap to compete on the global stage,” Livingston said.
“Enough is enough, we need clarity, and the only way we’re going to get clarity is if we go to court, so let’s do that.”
Kik’s trouble with the regulator started only days after it secured $98 million in late 2017 via a token sale.
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The initial coin offering (ICO) alarmed the market watchdog for its resemblance with securities, and the foundation was accused of selling unregistered securities.
The SEC sought clarification, and the project promoters had to give many official testimonies and were also issued subpoenas, the founder revealed.
The situation between the two parties is still strained as the regulator informed that it is going to pursue an enforcement action against the messaging platform, however, to date, the SEC did not initiate the legal proceedings.
If the regulator is not willing to take up the legal battle, Livingston is now determined to file a legal proceeding against them, seeking a clear definition of tokens which are classified as securities.
The foundation has created a Coinbase Custody account and deposited $5 million in Bitcoin, Ether, and Kin to cover the legal expenses of the court proceedings. They are also taking donations from any interested party who are willing to support the legal battle.
Meanwhile, a recent report by Coindesk revealed that the Kin Foundation already spent $5 million in its engagement with the US regulator.