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Kik, a Canada-based messaging app firm, has launched a crowdfunding campaign to raise $5 million in cryptocurrencies to help with its upcoming court battle with the U.S. Securities and Exchange Commission (SEC). Kin, the parent company of Kik, raised $100 million USD during the Kik messaging app ICO; the firm is now launching a Defend Crypto Fund to protect against a potential SEC enforcement due to that ICO.
The crowdfund was announced Tuesday on the Unchained Podcast, by the Kik founder and CEO Ted Livingston in the presence of Patrick Gibbs, a partner at law firm Cooley LLP. the campaign is being launched in the hopes that the lawsuit would eventually result in a new Howey test for crypto tokens, to determine which ones are a security. The Howey test which has been used by the SEC to determine which cryptocurrencies fall under the regulations and restrictions of securities has largely been criticized to be inadequate to fairly judge cryptocurrencies and tokens.
A dedicated website has already been launched to help with the crowdfunding campaign. The website is being dubbed as ‘Defend Crypto’ and Kik claims that the funds would not only help the company fight the said court battle but also support many other crypto firms who are under the threat of action being taken against them by the SEC. Defend Crypto website offers donation options in 19 cryptocurrencies. Big names like Bitcoin(BTC)trade, Ethereum (ETH)trade and Ripple (XRP)trade, as well as less standard options like Augur (REP), DAI and, last but not the least, Kik’s Kin (KIN) token.
KIN Cryptocurrency – Security or Not?
Kik has always insisted that its token is used as a cryptocurrency. However, the authorities in the SEC have shown concern that the KIN token might fall under the category of securities. Which means the KIN token would come under harsher regulations and oversight by the SEC as compared to other cryptocurrencies. It is understandable for Kik to want to avoid that outcome.
On its website, Kin states:
“After months of trying to find a reasonable solution, Kin has been unable to reach a settlement that wouldn’t severely impact the Kin project and everyone in the space. So Kin is going to take on the SEC in court to make sure there is a foundation for innovation going forward.”
Kik is encouraging other firms and supporters to help with their campaign against what they are calling an “innovation tax.” The crypto capital donated on the website will be held in a Coinbase cold wallet and will only be utilized once Kik’s $5 million has been spent. Unused funds will be allocated to “other initiatives.”