The United States-based Blockchain Association has filed an amicus curiae brief in support of Canadian messenger Kik amid the firm’s legal battle with the Securities and Exchange Commission.
The association addressed the April 17 brief to the court which is considering the case, asking it to deny the SEC’s motion for summary judgment and decide the case narrowly to avoid casting doubt on cryptocurrency projects that have yet to appear before the court.
In March, the SEC requested summary judgment, claiming that it possessed “undisputed evidence” that Kik’s ICO distributed unlicensed securities.
Not the same as Telegram’s case
Basically, the Blockchain Association says that the court must first determine whether Kik’s ICO to accredited investors and token sale to public buyers were, in fact, an integrated sale of securities and urges the court to not apply the approach taken in the ongoing Telegram case. The brief reads that:
“Complying with existing securities exemptions by contracting with sophisticated accredited investors amounts to a 'scheme' to distribute unregistered securities to the public at some point in the future. The Telegram decision treats cryptocurrency as somehow different from every other industry. Following that decision could undermine innovation in an important new field of technology while excluding an industry from the same securities law exemptions that are supposed to apply uniformly.”
The association further states that the SEC is ignoring the important differences in Kik’s activities and — as in Telegram’s case — has provided little clarity about its own interpretation of whether and when digital assets are securities.
More crypto firms face lawsuits
In the meantime, several major crypto companies — Binance, KuCoin, BiBox, BitMEX and parent company HDR Global Trading Limited, and alleged crypto issuers Block.one, Quantstamp, KayDex, Civic, BProtocol, Status, and the Tron Foundation — are facing class-action lawsuits that had been filed in a New York federal court, earlier in April.
The lawsuit alleges that numerous exchanges have sold unlicensed securities without broker-dealer licensing and engaged in market manipulation.