Kik’s Failure to Back Down has SEC in Catch-22

In choosing KIK as a test case for ICO legal precedence, the SEC has a long journey before them.

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  • KIK payed income tax on the proceeds they received from sale of KIN tokens.
  • KIK put a cap on the amount of Tokens any single purchaser could purchase of $4,400.
  • KIK’s offering materials did not tout the KIN token as an investment.
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Photo by Desmond Hester on Unsplash

What does it all mean?

We have echoes of the development of peer-to-peer music sharing. That new technology also disrupted the established methods. At the height of folly, the RIAA[7] brought over two hundred actions against otherwise law-abiding individuals, in many cases seeking tens of thousands of Dollars as punitive damages for very limited copyright violations. Although on the facts most of those cases did involve violations, pursuit of those actions was obviously on the edge of ridiculous. We now have new business models in respect of music distribution.

Josh Lawler is a partner at Zuber Lawler whose practice focuses on mergers & acquisitions, securities law and technology transactions.

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