The CEO of messaging platform Kik has revealed that the firm shed $5 million negotiating with the US Securities and Exchange Commission (SEC) over what the agency deems was an unregistered securities sale.
Founded by Canadian entrepreneur Ted Livingston in 2010, Kik secured $98 million in an ICO at the end of 2017 to fund its kin digital currency and ecosystem. According to the SEC, the sale may have violated securities laws, and its staff would suggest bringing an enforcement action against Kik.
Per Livingston, it has not happened yet, but the regulator and his company have been in talks since late 2017. “We’ve spent a lot of money on this, over $5 million. We’ve spent a lot of time on this, we’ve spent the last 18 months traveling to Washington,” he detailed.
Livingston claims that kin is being utilized as a currency. “In the last month alone, over a million people earned kin from 40 different apps, from 40 different companies. Over a quarter million people used kin, making it the most-used cryptocurrency in the world, and they’re not even willing to say that’s not a security,” he added, saying: “It just continues to drag out.”
Livingston said the SEC should provide clear guidance. “Enough is enough, you’ve been promising clarity for years now, somebody needs to go to court and get this settled,” he stated.
Addressing the agency, Livingston remarked:
“We want to find a win-win with you, we understand the tough position you’re in, but at the same time innovation needs to move forward.”
During the Blockchain Week, Livingston and others argued that regulatory uncertainty might be holding back the US crypto industry. Developers have to pause as they try to figure out what regulators might think of a certain process or innovation, slowing down the work.
Livingston cited competition as another issue. “You have companies like Binance, who look at what Coinbase does and say, ‘We’ll do that but we’ll do it everywhere but the U.S.’ – and now Binance has replaced Coinbase as the top exchange in the world,” he noted, adding: “We do not want to get Binance’d.”