Kik, a Canadian tokenized social media startup launches a $5 million crypto initiative dedicated to funds its lawsuit against the United States Securities and Exchange Commission (SEC). Ted Livingston, Kik CEO announced during the crypto-focused Unchained podcast by Laura Shin on May 28.
Livingston also the founder of Kik’s crypto project the Kin Foundation (KIN) states that a fund dubbed as DefendCrypto fund is formulated, that aims to legally challenge the U.S. SEC, so as to get regulatory clarity from the major U.S. financial watchdog. A few days earlier Livingston revealed that the firm has spent over $5 Million on negotiations with the SEC.
Notably, DefendCrypto.org, the fund’s domain was registered 26 days ago as of prime time, its official announcement was made on May 28 with Patrick Gibbs, the partner at California-based law firm Cooley. The podcast further reveals that the fund will employ custody service of Coinbase, a major American crypto exchange and wallet service.
In late 2017, KIK raised $100 million through an initial coin offering (ICO) sale for its Kin token. The ICO also attracted SEC’s attention, wherein the financial regulator issued a notice accusing the firm that Kik’s Token Distribution Event (TDE) violated securities laws.
The SEC went on to propose an enforcement action for Kik and the Kin ecosystem in November 2018, obliging Kik to respond within 30 days. Following which, Kik warned SEC that they will fight back against the proposed enforcement action against them, in January 2019.
With the DefendCrypto fund, Livingston plans to resolve the regulatory issues around the company and to ultimately end the regulatory uncertainty around currently spread about the ecosystem. Livingston notes that the SEC’s such action are hampering the industry growth rate and its ability to compete on the global stage. He concluded:
“Enough is enough, we need clarity, and the only way we’re going to get clarity is if we go to court, so let’s do that.”
Hester Peirce, the SEC commissioner who is also known as the “crypto mom,” raised similar concern in May this year that the cryptocurrency industry was being hindered by the relative slowness of the SEC’s regulatory decision-making.
Image source – Kik Twitter