Following the long-standing court battle between the Ontario-based social media crypto startup KIK Interactive Inc. and the United States Securities Exchange Commission (SEC), both parties have agreed to settle the case.
In June 2019, the SEC charged KIK for issuing Kin tokens worth $100 million via an Initial Coin Offering (ICO). The company countered the SEC’s accusation.
According to the court document today, the proposed settlement will require KIK to pay the regulator a $5 million fine. However, the proposal first needs to be endorsed by Alvin K. Hellerstein, the presiding court judge at the Federal District. If approved, it will bring the 16-month long court case to an end.
Although KIK previously had plans to continue fighting the regulator’s claim to any extent possible, the pending settlement would establish an outright loss for the startup.
The new proposal enjoins KIK tender 45 days’ notice before embarking on any Kin-related transaction for the next three years after the ruling takes effect. To this, Ted Livingston KIK’s CEO chose to remain silent.
Asides from submitting a prior notice to the SEC, the settlement will have little or no effect on KIK’s vision, as the startup can still go ahead with its ICO plans.
However, while the court asserted that the KIK would fold up in 2017 if it did not offer the public token sale, the startup argued it did not violate any securities law.
“The SEC should create clear rules for the crypto industry, rather than publish ‘conflicting statements’ and other non-binding forms of guidance,” Eileen Lyon, General Counsel at KIK, said at the time.
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Author: Ruth Shadrac