Altcoin News: “Negotiations with the SEC Cost Us $5 Million,” Says Kik’s CEO
May 17, 2019, by Marko Vidrih on ALTCOIN MAGAZINE
Kik’s CEO says the company spent $ 5 million on interaction with the SEC to resolve the issue of unregistered securities offer.
Kik’s messaging platform was founded by Canadian entrepreneur Ted Livingston in 2010 and raised $98 million during the ICO at the end of 2017. Later, the US Securities and Exchange Commission (SEC) stated that the placement of tokens could violate US securities laws and recommended that law enforcement action be taken against the company. According to Livingston, this has not happened yet, but his company has been negotiating with the SEC since the end of 2017.
“We’ve spent a lot of money on this, over $5 million,” he said. “We’ve spent a lot of time on this, we’ve spent the last 18 months traveling to Washington.”
In November 2018, the SEC published an official letter regarding the company. In her response to the Commission, Kik stressed the clause in the existing law, which states that currencies are not securities. Livingston continues to insist that KIN tokens are used as currency.
“In the last month alone, over a million people earned KIN from 40 different apps, from 40 different companies. Over a quarter million people used KIN, making it the most-used cryptocurrency in the world, and they’re not even willing to say that’s not a security,” said the head of the company.
While Livingston claims that he does not have plans to sue the SEC to gain more clarity on regulatory issues, he noted that the agency should provide clear guidance.
“Enough is enough, you’ve been promising clarity for years now, somebody needs to go to court and get this settled,” Livingston said in a statement to the SEC. “We want to find a win-win with you, we understand the tough position you’re in, but at the same time innovation needs to move forward.”
Livingston notes that regulatory uncertainty may deter the cryptocurrency industry in the United States. Developers must constantly act with an eye to what regulators will think about a particular innovation or process, and this slows down the work. Many companies may be afraid of actions by the regulator because today the SEC has released only one letter with a guarantee of inaction. In addition, among the issues affecting the market, Livingston also noted competition:
“You have companies like Binance, who look at what Coinbase does and say, ‘We’ll do that but we’ll do it everywhere but the U.S.’ — and now Binance has replaced Coinbase as the top exchange in the world,” he explained, adding:
“We do not want to get Binance’d.”
Author: Marko Vidrih