A representative of Canadian social media company Kik Interactive Inc. is set to sit down with attorneys from the Securities and Exchange Commission (SEC) in the coming weeks to provide details about the company and its native token, the KIN.
Yesterday, a federal judge in Manhattan ordered that the social media company share details with the financial watchdog concerning how it was able to change its business since 2018. As its first person to be deposed, the watchdog has now called Tanner Philip, the Head of Operations and Technical Adviser at the firm. The deposition has been set for January 29.
Fighting With the Feds
Kik and the SEC have been in the midst of one of the most high-profile legal battles in the cryptocurrency space for the better part of three years now, after the agency claimed in a 2017 filing that Kik had violated the Securities Act of 1933 by offering the KIN token to investors without getting clearance from it.
At its Token Distribution Event (TDE), Kik was able to raise about $97 million from offering the KIN token to investors. However, the company has been forced to dig into that fortune to help ward off the SEC for the past couple of years. Still, the legal battle took a toll, as the company announced last October that it would be closing down its messenger app and laying off about 90 percent of its total workforce.
It all seemed like the company was headed for a complete shutdown at the hands of the SEC, but in a complete reversal of fortunes, the company’s app was reopened once more, after Kik Interactive sold it to MediaLab, a holding company based out of Santa Monica. With more breathing room to fight the SEC, Kik requested for the formal definition of a trial date from the court, further arguing that the SEC still doesn’t have strong evidence to support its claim that the KIN token is a security.
Both parties eventually settled on a roadmap that will see them conclude their trial in June.
The SEC Isn’t Taking it Easy with Big Tech and Crypto
In the past, Kik has called on members of the crypto space to support it in its fight against the SEC, claiming that the resolution of this case could go on to define how digital assets and Initial Coin Offerings (ICOs) get treated by financial regulators going forward. That sentiment is beginning to hold true, as lawmakers and financial agencies have taken more of a hard stance against tokens- especially those being offered by major tech companies.
Apart from Kik, the SEC has also been embroiled in a legal battle with London-based mobile messaging company Telegram over the legal status of the latter’s GRAM token, which was set to launch last October. The case is eerily similar to this. Telegram was all set to launch a token to investors, but the SEC swooped in and ruined the entire thing based on claims that the token is a security.
Like this one as well, both parties have been involved in a legal tit for tat over how to address the GRAM going forward.