The Securities and Exchange Commission (SEC) of the U.S has prosecuted against Canadian startup Kik. The firm has been illegally conducting a $100 million securities trade of digital tokens. It was selling the tokens to the U.S. investors without any authorization of the U.S. laws and securities. The news comes from an official press release.
As per the SEC’s charges, the firm breached Section 5’s registration requirements of the Securities Act of 1933. The securities watchdog is seeking a permanent injunction, disgorgement plus interest, and a penalty. According to the allegation, Kik accumulated these funds in late 2017 without any legal authorization that compliance with the U.S. securities laws.
The co-director of the SEC’S Division of Enforcement, Steven Peikin says that Kik has masked the information from investors to which they were legally entitled. It shunned the investors from making an informed decision for their investment. Recently, the startup made a crowdfunding campaign to fund a lawsuit against the SEC.