The confrontation between the US Securities and Exchange Commission (SEC) and the Kik messenger developer company continues. For example, the Canadian Kik Interactive prepared and submitted to the court a response tp the Commission in a 131-page document, in which it accused the agency of fraud and distortion of facts.
Kik claims that the Kin token is not a security, as claimed by the SEC, but is just a token built into the application for buying games, digital products or other services in Kik Messenger.
According to Kik representatives, the Commission must prove that Kin tokens were sold in violation of the Securities Act.
Since Kin is not itself a security, the SEC must show that it was sold in a way that violates the securities laws. The SEC had access to over 50,000 documents and took testimony from nearly 20 witnesses prior to filing its Complaint, yet it is unable to make the case that Kik’s token sale violated the securities laws without bending the facts to distort the record.
General counsel, Kik
In particular, Kik notes that the agency quoted selective quotes or took words out of context when drawing up the charge.
In addition, company representatives are confident that SEC’s assumptions about Kik’s unfavorable financial position were included in the lawsuit for the sole purpose of exposing Kik in a negative light.
What really surprised us is just what lengths the SEC went to twist the facts. They cut quotes and [took them out of context] and that’s something we didn’t expect from the SEC.
He also noted that the SEC is trying to create the appearance that the Kin project was an act of despair, and not “than the bold move that it was to win the game, and one that Kakao, Line, Telegram and Facebook have all now followed.”
The SEC sued the Kik messenger developer, accusing her of conducting an unregistered sale of securities during the ICO in 2017.
However, Kik said it was "expecting something like that." It is worth noting that Kik announced the launch of a special fund to cover legal costs during the proceedings with the SEC back in May, since at the beginning of the year the company announced that it intends to challenge the Commission’s decision to recognize the project token as a security.