Earlier in 2017, Kik Interactive created one trillion of digital Kin tokens and sold it to U.S. investors to finance its operations. The SEC alleged that by that time, the company's business was failing and there was no product that could be used with the Kin tokens. Also, the SEC’s complaint alleges that Kin tokens were marketed as an investment opportunity promising an increasing value of tokens due to the rising market demand driven by the company’s efforts.
Kik Interactive intended to keep three million Kin tokens for the company to profit from the trade of tokens on a secondary market along with the investors. The claims made by the company required registering Kin tokens as a security, which Kik Interactive failed to do.
As a result of selling unregistered securities, the SEC is seeking a permanent injunction, disgorgement plus interest, and a penalty.
June 4, 2019