- SEC announced that the sale might have violated U.S. security law.
- Livingston does not plan on suing SEC, yet he seeks clear guidance from it.
Kik’s CEO reported that the company had spent $5 million after its engagement with the U.S. Securities and Exchange Commission (SEC). The regulator claims that it was an unregistered securities sale.
Founded by a Canadian entrepreneur Ted Livingston in 2010, Kik is a messaging app that garnered $98 million in an initial coin offering (ICO) at the end of 2017. Later, SEC announced that the sale may have violated U.S. security law and that SEC staff would suggest bringing an enforcement action against the company. Livingston reported on Thursday that his firm and the regulator have been in talks since late 2017. He said:
“We’ve spent a lot of money on this, over $5 million. We’ve spent a lot of time on this, we’ve spent the last 18 months traveling to Washington.”
SEC had filed a formal letter known as the Wells notice in November 2018 to which Kik replied that the company highlighted a clause in existing law that says currencies are not securities. Livingston said:
“In the last month alone, over a million people earned kin from 40 different apps, from 40 different companies. Over a quarter million people used kin, making it the most-used cryptocurrency in the world, and they’re not even willing to say that’s not a security.”
Livingston said he does want to work with the SEC, however, he said, “We want to find a win-win with you, we understand the tough position you’re in, but at the same time innovation needs to move forward.”
Regulatory uncertainty may be holding back the U.S. cryptocurrency industry.