SEC sues Kik for $100m for ICO of Kin
SEC comes down on the ICO craze
The US Securities and Exchange Commission said Kik Interactive illegally raised more than $55 million from US investors by selling an ICO for Kin without the proper disclosures and procedures. The sale raised $100 million for the company.
Kik has seen this coming for awhile and started crowdfunding to defend it.
Kik argues in its Wells notice response that Kin buyers had no expectations of profits from buying tokens however during the pre-sale a video showed the CEO of Kik saying "It will become super valuable"
"If kin were as popular as ether were today, that 30% [of company-held tokens] would be worth 9 billion dollars, that's awesome. We'd give some back to [investors]. You invested $50 million, maybe we'll give you $500 million out of that $9 billion," he said.
Now Kik lawyers say the company marketed Kin exclusively "as a way to participate in a fundamentally new way for consumers to access digital products and services, and for innovative developers, and their users, to be compensated for the value they provide."
Ominously, in the same video the CEO said, half-joking: "Turn the cameras off. That's going to haunt me one day. I hope not. Ooh, I'm already picturing it"
One of the ironies of this is that Kik didn't need the money from the ICO, it already had loads of venture capital money.
The SEC action isn't helping broader crypto today with Bitcoin down 9.5% to $7622.