SEC to Sue Kik Due to 2017 ICO

Watchdog believes Kik was performing unregisted securities sales, thereby violated the provisions of section 5 of the Securities Act of 1933 
05 June 2019   866

The US Securities and Exchange Commission (SEC) filed a lawsuit against the company-developer of instant messenger Kik, accusing it that during the ICO in 2017, it led an unregistered sale of securities. It is reported by CoinDesk.

In particular, the Canadian Kik Interactive Inc. accused of violating the provisions of section 5 of the Securities Act of 1933, under which the placement of securities requires registration.

By selling $100 million in securities without registering the offers or sales, we allege that Kik deprived investors of information to which they were legally entitled, and prevented investors from making informed investment decisions. Companies do not face a binary choice between innovation and compliance with the federal securities laws.
 

Steven Peikin

Co-director, SEC’s Division of Enforcement

The suit itself says that in October 2016, Kik hired an investment bank, which was supposed to help with identifying companies that could acquire its business. The investment bank contacted 35 market participants and signed non-disclosure agreements with seven companies that wanted more information about Kik.

By February 1, 2017, however, all seven bidders refused to buy Kik. Faced with the problem of diminishing reserves and not having the prospect of making profits from their current business, Kik's management discussed the idea of ​​launching a digital token as a means of raising capital. As a result, it was concluded that the ICO will be the only possible option for raising capital.

As a result of the ICO project, Kik raised $ 98 million, using these funds to develop its Kin token and the ecosystem based on it, in which users, it was claimed, could earn and spend cryptocurrency.

In January, the startup management announced that it intends to judicially challenge the decision of the US Securities and Exchange Commission (SEC) to recognize the token Kin as a security.

In addition, in May, Kik, with the support of Coinbase, launched a special fund to cover potential legal costs.

SEC to Accuse Veritaseum ICO of Fraud

SEC believes that project's tokensale, thru which it raised $14.8M back in 2017-2018 had a signs of scam and company misled the investors
14 August 2019   1850

The U.S. Securities and Exchange Commission (SEC) has sued New Yorker  and Veritaseum-related companies that have been caught by the agency in conducting an unregistered ICO with signs of fraud. It is reported by Cointelegraph.

According to documents published on the network, the SEC intends to hold Reggie Middleton accountable and immediately freeze the assets of Veritaseum Inc. and Veritaseum LLC.

The Commission claims that the defendants raised about $ 14.8 million through an initial coin offering (ICO) in 2017 - early 2018. At the same time, many investors were misled, as the company distorted information about the conditions of the token sale and deliberately hid some significant details.

The American regulator claims that the project still has about $ 8 million of illegally raised funds. According to the SEC, these assets must be frozen immediately.

Amid this news, the Veritaseum (VERI) rate has fallen by 70%. Now the coin is trading near the $ 5 mark, although at the beginning of 2018 its rate was approaching $ 500.

Veritaseum was created as a financial p2p platform, involving the movement of capital without traditional intermediaries. Also, VERI was positioned as a utility token for use in consulting services and access to various research works.

In 2017, Veritaseum blockchain startup fell victim to hackers, having lost $ 8.4 million from ICO investors.