ALTCOIN, BLOCKCHAIN

U.S. SEC Files Lawsuit Against Kik’s 2017 ICO

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against messaging mobile application Kik for allegedly operating an unregistered securities sale during its 2017 initial coin offering (ICO) of its kin token.

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“By selling $100 million in securities without registering the offers or sales, we allege that Kik deprived investors of information to which they were legally entitled, and prevented investors from making informed investment decisions,” said Steven Peikin, co-director of the SEC’s Division of Enforcement.

“Companies do not face a binary choice between innovation and compliance with the federal securities laws.”

According to the SEC, Kik had reported losses for years. The company’s management predicted internally that it would run out of money in 2017.

The company’s average losses totaled about $30 million a year.

Kik sold its kin token to the public, with discounts available to larger purchases, raising more than $55 million from U.S. investors.

The SEC alleges the tokens traded recently at approximately half of the value public investors purchased them for during the ICO.

Last month, Kik CEO Ted Livingston stated the company had already spent $5 million, later launching a “Defend Crypto” crowdfunding campaign, raising $5 million to support a possible lawsuit.

In a statement Tuesday, Livingston said:

“This is the first time that we’re finally on a path to getting the clarity we so desperately need as an industry to be able to continue to innovate and build things.”

The price of the kin token has fallen more than 25 percent after the lawsuit’s announcement.

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BLOCKCHAIN, ETHEREUM

Kik Messenger to Utilize Both Ethereum and Stellar Blockchains

Social messaging app Kik has announced they will be utilizing both the Ethereum blockchain and the Stellar platform  for their “kin” token, which raised $98 million during their initial coin offering (ICO) in September.

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“Kik will be one of the first mainstream projects that uses cryptocurrencies in a meaningful way. It will bring millions more people to this technology and we are super excited to be the platform this will be done on” said Stellar founder, Jed McCaleb.

The company will utilizing the Ethereum blockchain, where the tokens were initially launched, for liquidity, and Stellar for transactions.

In December, Kik CEO Ted Livingston stated Ethereum was “the dial-up era of blockchain”, but the company has chosen to stick with the second largest blockchain by market cap.

Utilizing an in-progress technology called atomic swaps, the cryptocurrency will be able to traded across the two blockchains.

“Creating a bi-directional blockchain with stellar will drive mass adoption of kin by providing faster confirmation times, low transaction fees and scalability,” said Livingston.

The social messaging app had 10,000 customers in 117 countries participate in its ICO and is currently ranked number 15 on the Apple App Store in the social networking category.

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