The SEC called on the court to expedite the ICO Kik Interactive trial

   The Securities and Exchange Commission (SEC) has called on the court to expedite the case against Kik Interactive, a Canadian company accused of conducting an unregistered ICO.

In its appeal to the District Court for the Southern District of New York, the SEC stated that Kik Interactive had not provided adequate arguments as to why KIN tokens were not registered as securities. As a reminder, in 2017 Kik conducted an initial placement of tokens (ICO), at which it raised about $100 million.

The agency claims that Kik sold tokens to investors, promising them a profit as the ecosystem expands, which is considered a key feature of the securities offer. In its petition, the SEC quoted Kik CEO Ted Livingstone as saying that "the price of a KIN token is likely to rise in price". This "investment scheme", according to federal laws, makes a token a security.

According to the Kik argument, tokens on pre-sale were intended exclusively for accredited investors to raise funds for the development of the KIN ecosystem. Then there was a public sale of tokens, aimed at ordinary users. However, the regulator refutes these arguments, as the startup did not present any differences than the two rounds of sale differed from each other. In addition, no restrictions on the sale of KIN tokens on the open market were applied to accredited investors.

Despite Kik's statement that the ICO was outside the Commission's remit, the agency believes the opposite, as tokens were sold to US citizens. Kik assures that it has fulfilled all requirements necessary for legal fundraising, namely, that it filled out a special form before the pre-sale, which does not require registration with the SEC.

As for the open sale, Kik denies any contractual obligations or promises to investors. The management of Kik states that according to the definitions of the Commodity Futures Trading Commission (CFTC) and the United States Internal Revenue Service (IRS), KIN tokens are not securities, but consumer goods. Moreover, Kik believes that the SEC is asking the court to extend its powers without understanding the status of KIN tokens and key aspects of their sale.

Last May, Livingstone announced the creation of a new DefendCrypto fund to cover the legal costs of litigation with the SEC, and said negotiations with the SEC cost him $5 million.