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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

#131

Post by flyGuyOnTheSly »

>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

To be fair...

Yes Kik did sell them as investments... claiming rising demand would drive up the price of Kin... which did indeed happen.

The kin tokens increased in value over 10x from the price they were sold to investors at. It didn't last, of course.

I still don't understand why they didn't get SEC approval before offering the token sale, however.

They were savvy enough not to allow Canadian investors for that very same reason... because they're a Canadian company and did not want to get mixed up in unregistered securities sales in Canada.

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

#132

Post by shyneeup »

dmix wrote: post #86
nostrademons wrote: post #76

Earlier quoted context omitted.

They want to add payments to their messenger app. That's a known business model and a hot area right now - WeChat pioneered it, Line does it too, and Facebook is working on a cryptocurrency-based solution that does the same thing.

The rewards could be huge if payments via messaging apps takes off in the west. It's really too bad WhatsApp sold to Facebook of all places. We could have a privacy-oriented chat platform with a cryptocurrency "small cash" type of transaction system built on top. Combined with some informal craigslist style mini-stores, which flourished in China via Wechat. I'm sure FB/WhatsApp could do it via normal payment channels…

Don't know enough about crypto, but whats the benefit of a payment system for messenger apps to run on crypto at all? If you're transacting through a centralized messaging platform doesnt that defeat the purpose of a decentralized currency or ledger?

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

#133

Post by Shivetya »

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!"

Here is the deal though, the SEC employs administrative law judges (ALJs) who even the President cannot remove and generally are immune electoral control and accountability

The SEC also enforces gag orders on settlements to hide the proceedings and discovery from the public which only allows them to continue their abuses of the system.

A common thread among SEC settlements, also in CFTC and CTFB settlements is summed up from a recent SEC agreement

"mak[ing] any public statement denying, directly or indirectly, any allegation in the [SEC’s] complaint or creating the impression that the complaint is without factual basis"

So basically you have no recourse against government agencies whose quasi legal status pretty much makes them immune to the checks and balances as specified in courts. If you want a closer to home comparison, FISA courts operate pretty much the same way. There is no disclosure other than what the government wants you to know and they have the full resources of the US government to take you down, the common tactic is to bankrupt individuals or threaten it to get the deals they want.

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

#134

Post by duxup »

Shivetya wrote: post #133
duxup wrote: post #52

Earlier quoted context omitted.

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!"

Here is the deal though, the SEC employs administrative law judges (ALJs) who even the President cannot remove and generally are immune electoral control and accountability The SEC also enforces gag orders on settlements to hide the proceedings and discovery from the public which only allows them to continue their abuses of the system. A common thread among SEC settlements, also in CFTC and CTFB settlements is summed…

This isn't anything like FISA.... that is a bizarre comparison.

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

#135

Post by at-fates-hands »

JackFr wrote: post #104
nostrademons wrote: post #69

Earlier quoted context omitted.

A lot of people think it, but if you're thinking it the last thing you want to do is publicize that and invite people (particularly the SEC) to ask "Why don't you want the SEC to sue you?" A number of smaller ICOs just settled with the SEC and refunded the money to investors when they got a Wells Notice. Those are all the folks who said "Oh man I don't want the SEC to sue me, I'm gonna get creamed in court." Kik is d…

> Kik is different in that they have deep pockets, strong legal counsel, and a product that's been out there for 8 years. Except they don't. The only money they have is from an unregistered sale of securities which was only undertaken because they HAD NO MONEY. Their product costs more to run than it makes, and is irrelevant to the SEC lawsuit.

> The only money they have is from an unregistered sale of securities which was only undertaken because they HAD NO MONEY.

Don't you think this would come out at trial? Sounds like the only reason they came out with an unregistered ICO was in order to generate revenue it needed to continue operating. That's a huge red flag for me if I'm an SEC investigator

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

#136

Post by flyGuyOnTheSly »

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.

Not according to the page linked to on the SEC website:

>The SEC seeks a permanent injunction, disgorgement plus interest, and a penalty.

So they're seeking $55,000,000 USD of US investor funds, plus interest, plus a penalty.

That would bankrupt Kik and decimate the future of the project.

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

#137

Post by ericseppanen »

will_brown wrote: post #119
snarf21 wrote: post #100

Earlier quoted context omitted.

It isn't insanity if you used other cryptos to buy big on Kik/Kin and they only way to protect your position is to not have it go away.

Well it’s throwing good money after bad. I believe it was Einstein who defined insanity as performing the same task over and over and expecting different results. If you invested/bought Kik because you wanted a “position” to make money on it, then it fits the definition of a security, so by throwing more money to fight the SEC to claim it’s not a security is a losing battle by your own “position”. The real irony is t…

https://quoteinvestigator.com/2017/03/23/same/

Not Einstein. It's a quote from a 1981 Narcotics Anonymous pamphlet.

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

#138

Post by wbl »

Shivetya wrote: post #133
duxup wrote: post #52

Earlier quoted context omitted.

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!"

Here is the deal though, the SEC employs administrative law judges (ALJs) who even the President cannot remove and generally are immune electoral control and accountability The SEC also enforces gag orders on settlements to hide the proceedings and discovery from the public which only allows them to continue their abuses of the system. A common thread among SEC settlements, also in CFTC and CTFB settlements is summed…

You can always appeal an ALJ order to federal court where it is reviewed de novo.

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

#139

Post by solotronics »

at-fates-hands wrote: post #135
JackFr wrote: post #104

Earlier quoted context omitted.

> Kik is different in that they have deep pockets, strong legal counsel, and a product that's been out there for 8 years. Except they don't. The only money they have is from an unregistered sale of securities which was only undertaken because they HAD NO MONEY. Their product costs more to run than it makes, and is irrelevant to the SEC lawsuit.

> The only money they have is from an unregistered sale of securities which was only undertaken because they HAD NO MONEY. Don't you think this would come out at trial? Sounds like the only reason they came out with an unregistered ICO was in order to generate revenue it needed to continue operating. That's a huge red flag for me if I'm an SEC investigator

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

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

#140

Post by flyGuyOnTheSly »

at-fates-hands wrote: post #135
JackFr wrote: post #104

Earlier quoted context omitted.

> Kik is different in that they have deep pockets, strong legal counsel, and a product that's been out there for 8 years. Except they don't. The only money they have is from an unregistered sale of securities which was only undertaken because they HAD NO MONEY. Their product costs more to run than it makes, and is irrelevant to the SEC lawsuit.

> The only money they have is from an unregistered sale of securities which was only undertaken because they HAD NO MONEY. Don't you think this would come out at trial? Sounds like the only reason they came out with an unregistered ICO was in order to generate revenue it needed to continue operating. That's a huge red flag for me if I'm an SEC investigator

It already came out upon initial investigation and most likely subpoenas:

>the company’s management predicted internally that it would run out of money in 2017. In early 2017, the company sought to pivot to a new type of business, which it financed through the sale of one trillion digital tokens. Kik sold its “Kin” tokens to the public, and at a discounted price to wealthy purchasers, raising more than $55 million from U.S. investors. The complaint alleges that Kin tokens traded recently at about half of the value that public investors paid in the offering.

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