The US Securities and Exchange Commission has filed a lawsuit against Canada-based Kik Interactive for the $100 million token sale the company announced in 2017.
In the lawsuit, the SEC claims that the social-media startup conducted an illegal $100 million offering of digital tokens by selling the tokens to US investors without registering their offer and sale as required under US law.
The SEC’s contention is that almost all tokens are essentially securities and thus subject to well-established regulatory requirements under the law. The financial watchdog claims that Kik was fully aware that its ICO could be considered a securities offering. Documents in the court filing allege that Kik proceeded with the sale without having built any functionality into its token beyond stickers.