A New York Court Judge finally ruled in favor of the SEC in the lawsuit against KIN’s $100 million ICO where they ruled that it was actually unregistered security offering so let’s read more in the cryptocurrency news sites.
Kin, of course, plans to fight the lawsuit. According to the latest ruling by the New York Court Judge, Kin’s $100 million ICO was designated as an unregistered security offering. Hon. Alvin Hellerstein, the judge at the Southern District Court of New York ruled that the token sale violated a US Security law:
“I hold that undisputed facts show Kin offered and sold securities without a registration statement or exemption from registration.”
Whether the token in question is security, was decided based on the Howey test. The test indicates that Kin’s token sale was an investment contract that was offered by an enterprise with profits derived from other efforts. Hellerstein noted that a few other courts applied the test to other cryptocurrencies and he said that he had to decide the case “without the benefit of direct precedent” so he said that the term investment contract is much more flexible than the static.
The development is a part of the ongoing US Securities and Exchange Commission ongoing lawsuit which started when the regulator put charges against the ICO back in 2017. Kin refused to settle with the SEC and decided to fight the charges. Kin noted they cooperated with the SEC until they filed the charges, but later there was no word from them anymore. The company also raised concerns that the regulator was taking extremely harsh sanctions against the entire blockchain industry.
Kin even started selling Kik, which was its main messaging app to another company to afford the lawsuits’ costs. Despite the ruling being in favor of the SEC, it doesn’t conclusively determine whether the company will have to pay a fine or will have to admit they did something wrong. Kin founder Ted Livingston said that Kin is considering an appeal while the legal team of the company says that the ruling raises more questions.
As previously reported in the cryptocurrency news sites, Kik blamed the SEC, the United States-based regulator for manipulating facts and taking things out of context in the lawsuit against the startup over the 2017 token sale.
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