A US court has ruled in favour of the US SEC after the regulator’s filing of a motion seeking summary judgment against Kik for violating the country securities laws. Kik, which raised $100 million from 2017 ICO, had filed its own motion of summary judgment but the court refused to grant this.
In his judgment, US District Court Judge Alvin Hellerstein agrees with the US SEC’s contention saying “undisputed facts show that Kik offered and sold securities without a registration statement or exemption from registration, in violation of Section 5.”
In a suit filed on June 4 2019, the SEC sought the court’s relief “in the form of an injunction barring Kik from violating Section 5(a) and Section(c) of Securities Act, disgorgement of ill-gotten gains and financial penalties.”
On the other hand, Kik, which raised $50 million on the last day of a its pre-sale (September 11, 2017), filed a Form D with the SEC claiming this particular fundraising was exempt. In denying the allegations, Kik asserts “as an affirmative defence that the definition of an ‘investment contract’ is void for vagueness as applied to Kik.”
Still, the court ruled against it and subsequently ordered both parties “to jointly submit a proposed judgment for injunctive and monetary relief.”
Salt’s 2017 ICO Also Found to Violate the Securities Act
Meanwhile, in a different case, the SEC has secured an undertaking by Salt Lending Inc to reimburse investors that participated in the June 2017 token offering that raised $47 million. The regulator had similarly charged that Salt “violated Sections 5(a) and 5(c) of the Securities Act by offering and selling these securities without having a registration statement filed.”
However, “in anticipation of the institution of these proceedings,” Salt Lending Inc instead submitted
