The US Securities and Exchange Commission (SEC) has sued Kik, which develops messenger applications, etc., for lawsuits against the securities law .
Kik conducted the initial coin offering (ICO) of the utility token Kin in 2017, raising nearly $ 100 million .
The SEC has determined that Kin is equivalent to securities such as stocks, and has launched a move to sue Kik for performing an ICO without applying for a securities issue registration .
Kik was not the first to receive similar charges, but last year Munchee, Airfox, Paragon Coin, Gladius Network, etc. were uncovered in unclaimed ICOs, and were ordered to refund investors and pay fines . .
The SEC has also imposed a $ 75,000 fine on EtherDelta , a popular diversified exchange (DEX) , not only for companies that have previously conducted ICOs , but most recently for unregistered securities trading businesses.
While many of these companies are following the SEC’s mandate, Kik has expressed its willingness to return, and last week released a dedicated website called Defend Crypto, which will raise the cost of the trial in crowdfunding.
The SEC uses a standard called “ Howey Test ” , which was created based on the trial in 1946, to determine whether an asset is a security.
Thorough commentary and discussion on the SEC’s “standard for regarding digital assets as security (security)”
The SEC believes that Kin’s buyers have invested in anticipation that Kik team’s activities will increase the value of tokens , and Kin ‘s “ share of expectations of reasonable profit from other’s efforts ” I determined that.
In fact, Kik stated that the increase in demand caused the value of Kin to rise , and it was known that at the time of the token sale, there was no utility in Kin as “the key currency of the economic zone “. You
The SEC acknowledges that cryptographic assets that were previously considered securities may be reviewed again . However, along with this example, such a project will also be required to refund the ICO funds , and many good projects will be in danger of being discontinued.
The basic currency “BAT” of Brave Browser, which performed ICO in the past, and the distributed storage service “Filecoin” are examples. Like Kik, both are projects that have been funded without completing the utility of the currency .
In recent years, security token offerings (STOs) complying with securities laws have also become popular, but this is by no means compatible with ICO. It is no exaggeration to say that the fate of Kik and the SEC match will determine the life and death of ICO itself .
Author: Yuya 【Coin Desk News】 – Source Post: http://gestyy.com/w1ORSF
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