Under Fire: Kik Is Gearing Up for a Fight With the SEC
Messaging app Kik intends to take the fight to the SEC if regulatory action is taken against its 2017 token sale.
Canadian-based social media startup Kik is gearing up to challenge a proposed enforcement action from the United States Securities Exchange Commission (SEC) over a fundraising initiative in 2017.
The American securities regulator believes that Kik’s Token Distribution Event (TDE) two years ago violated securities laws. The company raised $97 million during its fundraising phase, a princely sum for a platform that has garnered millions of users since its inception.
Following the SEC’s recommendation of an enforcement action in November 2018, Kik was served with a “Wells Notice,” a letter to the company that needs to be responded to in 30 days.
Kik replied to the SEC in their “Wells Response” letter in December, arguing that the SEC’s regulation by enforcement approach has negatively affected the development of blockchain and cryptocurrency in the U.S. and has subsequently led to businesses in the sector either shutting down their projects or moving overseas.
Before we delve into the intricacies of this situation, it is worth understanding what it is that Kik does, how its native token was created and works, and why it believes the SEC’s potential ruling is wrong.
Kik Messenger — privacy-focused messaging
Kik Interactive has been in existence since 2009, following its creation by a group of students at the University of Waterloo. The group was looking to solve a barrier in communication between Blackberry, Android and iPhone users.
Since its initial release in 2010, the Kik Messaging application has garnered a reputation for its privacy features, including its user sign