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SEC Charges Kik With Conducting $100M Unregistered ICO

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Re: SEC Charges Kik With Conducting $100M Unregistered ICO

#161

Post by monsterbash506 »

village-idiot wrote: post #66
abalone wrote: post #41

Earlier quoted context omitted.

They “delivered” only because they sold wheelbarrows to the 49ers. As gold rush history will tell you, most fortunes were made by merchants not miners. Name a non-ICO-infrastructure ICO that isn’t a scam.

Ethereum as infrastructure is also a dicey proposition. It works, slowly, but it doesn’t seem like there’s a lot of demand for “dapps” outside ICO tokens, gambling, and the odd Ponzi scheme. The smart contract revolution at this point is complete vapor ware.

Too bad the coolest Ethereum projects never get featured on HN. Let me list some.

Loans - Compound Finance, Dharma

Derivatives - Augur, Veil, Synthetix

Exchange - 0x, Kyber

AMM model "exchange" (always liquid markets) - Bancor and UniSwap.

And at the center of all of this is Maker and it's Dai stablecoin which is backed by Ethereum.

Re: SEC Charges Kik With Conducting $100M Unregistered ICO

#162

Post by Animats »

meowface wrote: post #89
nyx_ wrote: post #2

"The complaint further alleges that Kik marketed the Kin tokens as an investment opportunity. Kik allegedly told investors that rising demand would drive up the value of Kin, and that Kik would undertake crucial work to spur that demand, including by incorporating the tokens into its messaging app, creating a new Kin transaction service, and building a system to reward other companies that adopt Kin. At the time Kik…

Honestly, that sounds a lot less scammy than nearly every other ICO out there. Kik is an established company with a social network product used by millions. Given their market position, I think their idea isn't totally farfetched. I could be missing some aspects that indicate it is a total scam, but just from that paragraph alone (which is all I know about the topic), I could see warranted interest from investors. Lo…

But not an established profitable company. This is a money-losing startup looking for another funding round.

Re: SEC Charges Kik With Conducting $100M Unregistered ICO

#163

Post by earlz »

meowface wrote: post #89
nyx_ wrote: post #2

"The complaint further alleges that Kik marketed the Kin tokens as an investment opportunity. Kik allegedly told investors that rising demand would drive up the value of Kin, and that Kik would undertake crucial work to spur that demand, including by incorporating the tokens into its messaging app, creating a new Kin transaction service, and building a system to reward other companies that adopt Kin. At the time Kik…

Honestly, that sounds a lot less scammy than nearly every other ICO out there. Kik is an established company with a social network product used by millions. Given their market position, I think their idea isn't totally farfetched. I could be missing some aspects that indicate it is a total scam, but just from that paragraph alone (which is all I know about the topic), I could see warranted interest from investors. Lo…

There was no disclosure that they were hemorrhaging money nor that their product was significantly unprofitable though. I imagine interest would've been a lot less had that fact been public at the time. They were literally selling it as "invest now and we all make a lot of money later"

I think the SEC is interested in the conditions around their ICO, the misleading tactics, and the aftermath of it, more than the fact that they did an ICO

Re: SEC Charges Kik With Conducting $100M Unregistered ICO

#164

Post by nostrademons »

MagnumOpus wrote: post #154
solotronics wrote: post #139

Earlier quoted context omitted.

I am not sure if this is a legitimate argument because you can apply the same logic to Uber and Tesla.

Except that they confirmed to laws and SEC regs and Kik didn't? That makes all the difference...

Uber "conformed to laws" is rich considering HN commentary on that company over the last 8 years...

(To be fair, the SEC is pretty much the one government agency that Uber did not piss off - it's just the IRS, FBI, DoJ, and almost every local government in America that they're in trouble with.)

Re: SEC Charges Kik With Conducting $100M Unregistered ICO

#165

Post by sonnyblarney »

It's ridiculous that the SEC can't tell you what is and what is not going to work up front. My god, why should companies have to risk so much in this.

Either they provide perfectly clear guidelines or they can screw off.

Anything vague is extremely bad for business as it causes undue risk, confusion, lawyers galore.

Also - timeframes matter. This event took place quite some time ago, it's totally unfair that the process takes this long.

The briefing, roadshow materials, legalese should be presented to the SEC and they should 'approve or not', and if not, then they can be taken to the courts before the ICO so that everything is legal up front.

I'm not one bit empathetic to Kik's ICO, if find it all kind of shady, but that should be made very clear before, not after actions are taken.

Re: SEC Charges Kik With Conducting $100M Unregistered ICO

#166

Post by sonnyblarney »

ChrisArchitect wrote: post #31

Kik is Canadian technically no?

Yes, but it was a a mostly US ICO. If it happens in the US it's subject to US regs.

Funny enough, none of it is legal in Canada apparently and Canadian citizens were not allowed to participate in the ICO.

Re: SEC Charges Kik With Conducting $100M Unregistered ICO

#167

Post by shawnz »

burtonator wrote: post #125
mindcandy wrote: post #24

Note that Kik has expressly stated that they have really wanted this case to go to court for some time now. They strongly believe that the SEC guidance so far has been vague and non-committal to the point of becoming damaging. They believe they have a case that Kin is not a security and that the Howey Test is being mis-applied to many cryptos. By going through with the suit they hope to fast-forward more concrete gui…

This was my issue at the time too.. It was a horribly vague situation. The SEC usually acts but the penalties are usually for 1/100th of the profits. If Kik loses here they're just going to make them pay $1M 'penalty' and move on.

Why should penalties necessarily bankrupt the company? Shouldn't the penalty be proportional to the damage they created by doing things improperly?

Re: SEC Charges Kik With Conducting $100M Unregistered ICO

#168

Post by village-idiot »

duxup wrote: post #52
mindcandy wrote: post #24

Note that Kik has expressly stated that they have really wanted this case to go to court for some time now. They strongly believe that the SEC guidance so far has been vague and non-committal to the point of becoming damaging. They believe they have a case that Kin is not a security and that the Howey Test is being mis-applied to many cryptos. By going through with the suit they hope to fast-forward more concrete gui…

Doesn't everyone publicly look forward to proving their case in court when the inevitable legal battle is obvious? Not many folks say "Oh man I don't want the SEC to sue me, I'm gonna get creamed in court!"

In my opinion it’s a bit like hearing the accused proclaim their innocence. My response is always “well yeah, everyone declares that they’re innocent”.

Re: SEC Charges Kik With Conducting $100M Unregistered ICO

#169

Post by modeless »

This was inevitable. As I said two years ago[1], just listen to Kik's own words:

"When we looked at raising another round [of VC funding], we asked ourselves how do we answer the question about how we will become a profitable business [...] We didn’t have an answer we really believed."

... so instead they decided to raise money from unsophisticated investors in an unregulated market, where nobody asks such inconvenient questions! No surprise that the SEC is upset.

[1] https://news.ycombinator.com/item?id=15245656

Re: SEC Charges Kik With Conducting $100M Unregistered ICO

#170

Post by nprateem »

nyx_ wrote: post #2

"The complaint further alleges that Kik marketed the Kin tokens as an investment opportunity. Kik allegedly told investors that rising demand would drive up the value of Kin, and that Kik would undertake crucial work to spur that demand, including by incorporating the tokens into its messaging app, creating a new Kin transaction service, and building a system to reward other companies that adopt Kin. At the time Kik…

> Who even bought this stuff?

North Korea probably.

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