The U.S. Securities and Exchange Commission has been granted summary judgment by a judge in the District Court for the Southern District of New York against tech company Kik, in the latest development in its case against the company’s $100 million initial coin offering (ICO). Judge Alvin Hellerstein ruled in favor of the SEC and against Kik’s $100 million ICO, finding that the ICO was, in fact, an unregistered digital token offer, contrary to Section 5 of the Securities Act.
“Kik offered and sold securities without registration.”
“As detailed further herein, I hold that undisputed facts show Kik offered and sold securities without a registration statement or exemption from registration, in violation of Section 5. Therefore, the SEC’s motion for summary judgment is granted, and Kik’s motion for summary judgment is denied,” the judge said in the order. As a next step, Judge Hellerstein called on the parties to create “a proposed judgment for injunctive and monetary relief,” to be submitted before October 20. The court further ruled that ff both parties cannot agree on a proposed judgment, they should note their differences in a single document, supported by separate statements in a single letter, to be submitted by October 20.
Kik’s CEO plans to file an appeal against the judgment.
The CEO of the tech company Kik, Ted Livingston, said that they were disappointed with the court’s judgment. “We are obviously disappointed in this ruling. We are considering all of our options, including filing an appeal. To be clear, Kik has always supported the Commission’s goal of protecting investors, and we take compliance seriously,” the CEO noted. “While this decision is a setback for Kik, this decision does not impact Kin and the growing ecosystem of developers making Kin the most used cryptocurrency by mainstream consumers,” Livingston added.