Kik Seeks $5 Million in Crypto to Oppose US SEC Over KIN Token Status
The project, a promising ICO based in Canada, saw troubles with the US Securities and Exchange Commission, as the KIN digital asset had an uncertain status, possibly deemed a security.
The KIN digital token may be considered a security, and has been causing trouble for the Kik company since the ICO in 2017. In the past few weeks, Kik admitted that the ICO landed it in hot waters, causing extraordinary expenses to communicate with the US Securities and Exchange Commission.
On the UnChained podcast, CEO of Kik, Ted Livingston, announced a fundraising project to take the SEC to court and demand a new Howey test for the KIN digital asset. The project raised $5.2 million in various cryptocurrencies so far, exceeding the goal.
“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,” said Livingston, pointing out that the position of the SEC has hampered the work of Kik and multiple other crypto-related projects.
The Kik chat app managed to raise between $70 and $100 million’s equivalent of Ethereum during its ICO, performed at a time when ETH prices hovered around $300. But it is unclear what became of the funds, and whether Kik sold some of the ETH. In any case, it is somewhat strange that one of the largest token projects would be seeking new funding.
The KIN digital asset is also hovering at extremely low prices, around 50% lower than the ICO, and is quite illiquid. Kik has abstained from listing the token on multiple exchanges, fearing that exposure to crypto markets may hurt the mainstream business of the corporation.
Currently, KIN is in the process of token migration, opening the opportunity for all Ethereum-based KIN owners to switch to the new network, based on the Stellar (XLM) technology. Currently, KIN tokens trade at $0.000043, failing to recover the one-penny peak achieved in late 2017 and early 2018.
The KIN token is used within the Kik app, for a reward system related to tasks and advertising. KIN is listed as the second most active digital token on Blocktivity, only displaced by EOS. KIN marks 3.9 million transactions in 24 hours, with a record above 5 million transactions in a single day.
Skeptical opinions, however, view the Kik ICO as a failure, especially with the drive to secure new funding and donations.