The Canadian based social media startup Kik will fight SEC, the US Securities and Exchange Commission over its initial coin offerings(ICO). For this, it has launched a crypto crowdfunding of whopping $5 million. The founder cum CEO of Kik, Ted Livingston along with Cooley LLP, a partner at a law firm made this announcement on a crypto-based podcast.
In the podcast, they said the fund will use the custody service of major US crypto exchange Coinbase. A website is already set up and will be open to the fundraising effort not only from people but many crypto firms that may face the same action. Livingston believes this might stop the existing doubts and questions revolving the crypto industry. The launch of the campaign will prompt a new Howey test for crypto tokens.
In retrospection, SEC in 2017 believed that Kik’s Token Distribution Event breached certain security laws. Following the SEC’s proposal of enforcement action in November 2018, Kik got a “Wells Notice”. Kik answered SEC stating that the latter’s guideline has contrarily influenced the improvement of blockchain and digital money in the U.S.