Kik will have to pay $ 5 million to the SEC. Over a year's worth of battle over the $ 100 million ICO ends

Kik will have to pay $ 5 million to the SEC. Over a year's worth of battle over the $ 100 million ICO - KIK 1024x576 endsOn October 21, U.S. District Judge Alvin Hellerstein ordered Kik to pay a $ 5 million fine and give the SEC 45 days notice on any Kin token transaction for the next three years, making the proposed ruling effective. by both sides, presented the day before.

Agreement found between Kik and the SEC

Kik and the United States Securities and Exchange Commission (SEC) managed to reach a turning point in their dispute over a 2017 token sale by settling a $ 5 million fine.

According to public court documents, the proposed ruling for an injunctive and monetary relief, which also enjoins the Canadian firm against future violations of the U.S. securities law, still needs the approval of Federal District Court Judge Alvin K.

If approved, the deal would end a year-long legal fight between the two sides. Kik will henceforth give the SEC 45 days notice on any transaction related to its Kin tokens under the proposal. This notice order will expire three years after the judgment begins to take effect. CEO Ted Livingston declined to comment.

A legal happy ending

A similar lawsuit filed by the regulator against the Telegram messaging platform meant that the company's blockchain project, Telegram Open Network (TON), was abandoned before it could even be launched.

But Kik's proposed deal has a fundamental difference from Telegram's unfortunate TON affair: it's not destroying the defendant's token projects. Forcing Kik to notify the SEC of any kin sales within the next three years is the only real effect of the agreement. The sentence would confirm a happy legal ending that only 20 days ago seemed to be a sensational end for Kik.

More clear rules for cryptocurrencies

Kik had initially announced that it hoped to beat the SEC in court, potentially setting a precedent for how token sales could be dealt with under US securities law.

However, he withdrew from a jury trial request in March and missed a motion for a summary judgment last month. In the latter case, a judge ruled that Kik's issue of Kin represented a investment of funds in a mixed company that sought to raise the price of the token, taking up some points of the Howey test, a case of the United States Supreme Court used as a precedent to assess whether assets are securities or not.

Kik general counsel Eileen Lyon said in September that the SEC should create clear rules for the cryptocurrency industry, rather than publishing "conflicting statements" and other non-binding forms of guidance.