Canadian instant messaging application company Kik launched a cryptocurrency crowdfunding campaign to support its lawsuit with the US Securities and Exchange Commission (SEC).
Kick founder and CEO Ted Livingston and Cooley LLP partner Patrick Gibbs announced the news on Tuesday, and they hope that the event will "finally develop a new Howey test for crypto tokens to determine which Tokens are securities."
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“Only last month, more than 1 million people got kin through 40 different apps and 40 different companies. More than 250,000 people use kin, which makes it the most used cryptocurrency in the world, but they (SEC) is not even willing to admit that this is not a security."
The company has set up a dedicated website, "Defend Crypto," to help supporters donate money for the event. The site's founders said the site was not only to support Kik, but to support many cryptocurrencies that might be affected by the US regulator. The site offers donation options for 19 cryptocurrencies, including Bitcoin, Ethereum, XRP, Augur (REP), DAI, and of course Kik's own token.
Although Kik insists that the use of the token is currency, the SEC has expressed concern that kin may be a security and that the regulator may initiate law enforcement proceedings against the company.
In fact, SEC Chairman Jay Clayton has previously stated:
“I think every ICO I have seen is a kind of securities.”
“I want to separate the ICO from the cryptocurrency. ICOs are securities issuance, and we should supervise them like regulatory securities issuance.”
Kik stated on the website:
“After a few months of hard work, Kin tried to find a reasonable solution, but has been unable to find a solution that would not seriously affect the Kin project and everyone in the circle. So Kin will be in court with the SEC to ensure Lay the foundation for future innovation."
Kik believes that the case will set a precedent for cryptocurrency regulation in the United States, and the Defend Crypto campaign will ensure the rational use of funds and “do this in the right way”. The company claims that it has spent more than $5 million on this case and is now committed to investing $5 million in Bitcoin, Ethereum and Kin again to "resolve the problem on behalf of the industry."
The event initiated by Kik also won the support of the cryptocurrency community. Due to the influence of US regulatory policies, the development of cryptocurrencies in the country has repeatedly hit the wall.
Credit currency investor Fred Wilson revealed that he has donated money to this event:
"I and Kin both hope that DefendCrypto.org will allow more important cryptocurrency projects that are silently fighting the SEC to go public, allowing the cryptocurrency sector to raise funds to help them continue fighting."
US government law enforcement defense and securities litigation lawyer Jake Chervinsky said on Twitter:
“This is the most important thing in the world of cryptographic securities in 2019 and is much more important than any SEC guidelines or proposed legislation. The US SEC has always claimed that digital tokens are securities, but they can prove it in court. A little? Respect the position of Kin."
The Circle, which had been plagued by regulatory problems and had to lay off 30% of its work, also tweeted:
"Circle has been calling for clarity in regulation to promote the development of encryption technology in the United States. Fortunately, in this fight, we are not alone. Circle and Poloniex support and appreciate the Kin Foundation's efforts to protect encryption technology. As Fred Wilson pointed out, we are at a critical moment in the industry, the United States has the risk of being left behind, and entrepreneurs should not be forced to innovate elsewhere. Legislators should stop applying the laws enacted in the 20th century to 21 The technology created by the century."
Kik also encourages supporters to donate cryptocurrencies to an account in Coinbase to counter the “innovation tax” charged by the SEC, which can only be used after Kik’s $5 million has been spent. Unused funds will be allocated to “other plans”.