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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

#231

Post by tasssko »

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…

Using other peoples money to pay for lawyers to defend against taking peoples money illegally. Yes I fully expected this to happen.

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

#232

Post by microcolonel »

ip26 wrote: post #204
modeless wrote: post #169

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 inconvenie…

A refreshing perspective compared to the usual HN "it's your fault (& no one else's) that you got defrauded on Kickstarter" position.

I hardly find that perspective “the usual [on] HN”.

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

#233

Post by tx-0 »

modeless wrote: post #169

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 inconvenie…

> just listen to Kik's own words

if they had raised money by telling a story that they didn't believe to the VC's to raise money from the VC's, then they would have been guilty of something by their own words: but they didn't, and their point in saying that was they did not do that. Instead, they pivoted...

The money they raised in the ICO has the SEC upset, but not for the reason your example refers to, but simply for lack of registration.

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

#235

Post by NelsonMinar »

macspoofing wrote: post #79
NelsonMinar wrote: post #77

Has Kik cleaned up its child porn problem? Judging by a quick search, it's still the medium of choice for monstrous people in 2019. https://www.theverge.com/2017/8/6/16104280/kik-messenger-app...

>it's still the medium of choice for monstrous people in 2019. You posted a link from 2017

Yes I did. Which is why I asked if they've changed. And then today, in 2019, I did a search for "Kik child porn" and found several brand new convictions for people trading child porn over Kik from 2019. So I said "still the medium of choice". Would you like me to post all those 2019 links for you? I presumed you were capable of finding them yourself.

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

#236

Post by jjeaff »

pfisch wrote: post #227
ip26 wrote: post #204

Earlier quoted context omitted.

A refreshing perspective compared to the usual HN "it's your fault (& no one else's) that you got defrauded on Kickstarter" position.

I mean it is generally your fault when you get scammed and your money is gone. Unless they scammed a third party who gave your money away. That is an entirely different can of worms. It is also the scammers fault for scamming, and they face their own set of consequences. I also think there is this bizarre double talk on HN where people say sophisticated investor status shouldn't be a thing while also condemning ICOs,…

On a side note, I wish the term, "sophisticated investor" wasn't the official one.

It's a misnomer because it implies there is some kind of knowledge or skill threshold required.

What it really means is "has enough money they can afford to lose some".

In reality, there are plenty of people who have tons of money and not a clue how to invest it well.

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

#237

Post by mark3141 »

Kik Responds To SEC Complaint

> Eileen Lyon, Kik's General Counsel commented, "For the reasons set forth in our Wells Submission, the SEC's complaint against Kik is based on a flawed legal theory. Among other things, the complaint assumes, incorrectly, that any discussion of a potential increase in value of an asset is the same as offering or promising profits solely from the efforts of another; that having aligned incentives is the same as creating a 'common enterprise'; and that any contributions by a seller or promoter are necessarily the "essential" managerial or entrepreneurial efforts required to create an investment contract. These legal assumptions stretch the Howey test well beyond its definition, and we do not believe they will withstand judicial scrutiny."

https://www.prnewswire.com/news-releases/kik-responds-to-sec...

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

#238

Post by jjeaff »

tasssko wrote: post #231
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…

Using other peoples money to pay for lawyers to defend against taking peoples money illegally. Yes I fully expected this to happen.

No idea how often they go after it, but if you pay your attorney with ill-gotten gains, those funds can be confiscated from the attorneys for restitution to the victims.

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

#239

Post by elliekelly »

seibelj wrote: post #228
elliekelly wrote: post #222

Earlier quoted context omitted.

> doesn't that mean that cryptocurrencies which fail a Howey test are in the clear? Correct. Though I get the impression you think most tokens fail Howey and I’m not sure that’s the case. In SEC v Lauer the court found a “common enterprise” where there was only one investor so the court’s application of the Howey test isn’t cut and dry but there’s an expectation the court will apply it to the specific circumstances a…

I think it won't be such a cut-and-dry case to say that a token, given for free, without any promises of dividends or equity, run on a decentralized network, is a straightforward security which should be registered and regulated by the SEC. The Kik case may be a security but other cryptos are nowhere near as clear.

Yes but I suppose that’s the risk Kik is taking for the entire industry whether the rest of crypto is ready or not. A bunch of judges who hardly understand what cryptocurrency is, let alone how it works, will very likely come up with a new test to determine whether a digital asset is a security. That test might be very narrowly tailored to the specific facts and circumstances of the kik case or it might be very broadly constructed so as to sweep in far more tokens than even the SEC intended. Rather than simply waiting for the SEC and industry to organically work through the confusion Kik is taking a big legal risk because their back is against the wall. But the risk they’re taking has the potential to negatively impact many others.

I’m hopeful that, whatever the outcome for Kik, Congress will amend the definition to provide everyone with some clarity one way or the other.

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

#240

Post by otw »

nostrademons wrote: post #195
nefitty wrote: post #190

Earlier quoted context omitted.

Wow, when you see it laid out like that, crypto looks terrifying. Note, I mean as an investment independent of technological prospects.

Curious why? Investment in new & emerging technologies or markets is always high-risk: I've had years when my Emerging Markets index fund lost half its value, and I know friends that basically lost everything in the dot-com bubble. Hell, the S&P 500 lost 40% of its value in 2008. I would hope that nobody is putting money into crypto that they need to live on. But for money that you aren't going to need for years, the…

Can you sketch what you mean by there being a good chance some type of cryptocurrency will replace the financial system of today?

Is the idea something along the lines of the double forces of greed and fear causing the perfect bubble? The one that doesn't pop because it eats its own downside on the way?

Why won't governments just shut down the on-ramp exchanges if the space ever looks like more than a way to gamble or make hidden-ish transactions?

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