Social media company Kik has affirmed that the United States Securities and Exchange Commission (SEC) blew up executive’s comments out of proportion.
On Wednesday, the company filed a 130-page document in which it made targeted rebuttals of some of the SECs previous claims. In the filing, Kik went on to reiterate its stance that it had not carried out an unlicensed securities offering when it offered its KIN token to investors.
In the document, Kik CEO Ted Livingston accused the financial watchdog of playing dirty and doing its best to make the company look bad. In an interview with industry news outlet CoinDesk, Livingston further added that what especially appalled his team was the length that the SEC was willing to go to twist the facts.
In his words, “They cut quotes and took them out of context, and that’s something we didn’t expect from the SEC.”
The filing was in response to multiple allegations by the SEC that Kik had performed a securities offering without registering with it. The regulator went on to claim that the Toronto-based company made the offering in a bid to keep its platform going when revenue was on a decline.
However, the social media firm countered, saying that the public offering for KIN wasn’t a securities sale. In the latest filing, Kik’s attorneys stated that the SEC knows its allegations were unreliable. Thus, the stock trading regulator has created a “highly selective and misleading” scenario of the sale.
Both parties have met with a judge from the Southern District of New York with an intent to resolve a timeline for a trial. Livingston added that Kik asked for a May 2020 trial date. However, the regulator requested for a period later in the year. Livingston, however, stated that his company remains confident about the case.
SEC’s Attention Not Good for Business
Amongst many other take-ups on the pending issue, Livingston says SEC’s deep dive has taken some toll on Kik. One of such “detrimental impacts” of the lawsuit is that it has cost the messaging firm a reasonable sum of money.
The firm’s top man claims the situation has eaten up $6 million to date. Besides, Kik has spent valuable time “compiling documents for discovery and testifying in Washington,” and they’ve provided the regulator with over 50,000 emails and 200 hours of filmed testimony in the hopes of completing a thorough discovery on the case.
As Livingston sees it, Kik could have used this time to speed up the KIN ecosystem‘s development. However, there’s a more drastic impact, as all this unwanted attention has shaken KIN’s price. When the SEC filed the lawsuit, the price of the token plummeted, going from $0.000036 to $0.000025. It seems that the desire for Kik customers to buy cryptocurrency has fallen even further, as KIN now trades around $0.000017.
Regardless, Kik is surging on, standing on the fact that the outcome of its battle with SEC will shed more light on the application of securities laws and the sale of the token.