This Week in Cryptos: Fed Chair Speaks of BTC and Gold While Binance Launches Margin Trading

Key highlights

Fed Chair compares BTC & Gold
SEC Approves First Two RegA+ Tokens
Miami Dolphins accepts LTC
Chinese Police Seize 4,000 Cryptocurrency Miners
Binance launches margin trading

Fed Chair compares BTC & Gold
In an interesting turn of events this week, Federal Reserve Chairman Jerome Powell said that he can foresee a return to an era where multiple currencies are in use in the United States. During Powell’s testimony before the Senate Banking Committee on Facebook’s planned Libra cryptocurrency, he said “Almost no one uses bitcoin for payments, they use it more as an alternative to gold,” he said Thursday afternoon. “It’s a speculative store of value.
SEC Approves First Two RegA+ Tokens
Slowly but steadily, this week, SEC should sign of moving positively towards cryptos. This week, SEC approved First Two RegA+ Tokens, Blockstack, and Props. This green light from the regulator meant the companies could now raise funds through token sales. Props, a spin-off of influencer live-streaming app YouNow, already raised $21 million in a pre-sale with the likes of Union Square Ventures, Comcast, Venrock, and Casey Neistat and will not be raising any money with the RegA+. Blockstack, on the other hand, is seeking to issue a limited amount of “stacks,” which will allow users to purchase domain names, personal identities, and network traffic on the Blockstack network.
Miami Dolphins accepts LTC
This week, another sports team associated itself with cryptos. And its NFL’s Miami Dolphins. Announced by the Litecoin Foundation this week, the partnership between the NFL team and Litecoin will kick off on Sept. 5 – the start of the 2019 NFL season where the Dolphins will accept Litecoin as their “official cryptocurrency.” With this partnership in place, Dolphins fans, at home games at the Hard Rock Stadium, will be able to pay with Litecoin and bitcoin when buying tickets for the Dolphin’s 50/50 raffle, which gives half of the proceeds to the Miami Dolphins Foundation and its charitable causes.
Chinese Police Seize 4,000 Cryptocurrency Miners
Moving across the Eastern countries, this week saw some bad news coming from China. Police in Jiangsu, an eastern-central coastal province in China, seized 4,000 miners that were being used to illegally mine cryptocurrency at nine different factories. The police launched an investigation after a local power firm reported an abnormal electricity consumption spike that led to an energy loss of about $3 million.
Binance launches margin trading
Another service addition but Binance to enhance its offerings and its margin trading. In a company announcement, Binance CEO Changpeng “CZ” Zhao said that the new platform will serve to amplify “trading results of successful trades.” Using the new Margin Trading platform, users can leverage their digital assets in order to borrow funds from Binance. They can then trade the borrowed money — a practice that comes with high risk but also allows for amplified profit potential.
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Source: CoinGape

Amidst Recent Hack, Remixpoint Gets New Crypto Services Approvals

Bitherb Co. Ltd. which is a subsidiary of Japanese public company Remixpoint, which operates a regulated Japanese crypto exchange, Bitpoint Japan, has been approved by Thailand’s Securities and Exchange Commission (SEC) to operate four new crypto services.
According to report on the commission’s website, the company, which has not begun operating on these approvals yet would be able to operate along the lines of the country’s SEC categories of crypto operation approvals available to companies including crypto exchange service, digital token exchange service, crypto brokerage service, and a digital token brokerage service.
The past few days have been particularly disheartening for Remixpoint and its subsidiary companies. On Thursday, the company announced a break of security in which one of its subsidiaries, Bitpoint, a Japanese crypto exchange was hacked and lost $32 million in crypto assets. Although the assets that were stolen were not exactly reported at the time, the exchange had trading support for five major cryptos including BTC and ETH.
The news of new approvals and event of hacking coming at the same time would create a mixed feeling for the big company who seemed to have several subsidiaries. While issues of refunding the customers affected in Bitpoint hack comes to mind, another issue is the funding of the new projects recently gotten approvals for.
Thailand seems to be catching up in the cryptocurrency adoption game. Recently, the Thai’s SEC approved three other companies to operate crypto services. These companies, which were all approved this year include Bitkub Online Co. Ltd. (Bitkub), Bitcoin Co. Ltd. (BX), and Satang Corporation (Satang Pro) — were approved in January. All of them got approvals for both cryptocurrencies and digital tokens.
Remixpoint announced in February that  BitHerb Co. Ltd. had gotten four approvals. However, the commission had not completely validated the subsidiary’s system and had not added it to its list of approved companies.
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Source: CoinGape

For the First Time Ever SEC Approves Blockstack Token Sale Under Regulation A+

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For the First Time Ever SEC Approves Blockstack Token Sale Under Regulation A+
SEC, for the first time ever, approved a $28 million Reg A+ offering for decentralized Internet company Blockstack. The company will begin selling the SEC-approved tokens, essentially an investment vehicle for fundraising, as of today.
For the First Time Ever SEC Approves Blockstack Token Sale Under Regulation A+

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How Crypto Custodian Firms will Form New Age Banks Under the SEC Guidelines: Analyst

Recently, the SEC in the US released a new set of guidelines on 8th July 2019, specifically for cryptocurrencies service providers. The SEC regulations have kept the start-ups under a lot of doubts for the current guidelines have failed to cover cryptocurrencies.
According to their new press release, the SEC will view custody arrangements and non-custodial arrangements differently. Furthermore, it has also allowed for the inclusion of non-custodial service firms to operate in the US. This is a positive move for start-ups like P2P platforms, payment facilitators, and OTC desks.
Caitlin Long, from the Wyoming Blockchain Task Force – a state-sponsored Task Force, established for blockchain development, reviewed the new rules and shared here analysis for the future of Crypto Custody Firms.
The pending ETF proposal, along with several other trading applications and Exchanges require the firms to act as custodians of the cryptocurrencies. Hence, Caitlin thinks that
“SEC’s new guidance would have been a bummer for the #crypto custody industry were it not for #Wyoming‘s new #SPDI law”
The State of Wyoming in the Western part of the United States has enacted several laws related to blockchain earlier this year, making it the only state which provides a comprehensive legal framework for entities engaging with cryptocurrencies.
The ‘Custody Rule & Customer Protection Rule’ set up by the SEC is to protect the traders and investors against all possible threats to their investments. The Crypto Custody firms have so far established themselves as Trusts; however, they are still failing to meet the SEC guidelines.
here’s the definition of “bank” under the Exchange Act–state-chartered banks work here, but trust cos don’t. So…#Wyoming is where #digitalsecurities custodians (& #crypto custodians more broadly) are likely to set up shop, using our new #SPDI law. Come check us out!
Definition of a bank according to the SEC (Source)
SPDI is an abbreviation for ‘Special purpose depository institutions,’ these are essentially banks that act as custodians but do not engage in any kind of lending or leveraging activities. The inclusion of such services within the Financial Industry is imperative because it will help prosper ‘hard money’ over an interest rate and inflation driven economy that is expected to doom. Many experts have suggested that the current financial system is failing, and cryptocurrency is a hedge against that.
Caitlin also predicted that in a tweet that Trust companies in the US like Gemini, Grayscale, and so on will probably end up being banks to facilitate crypto trading and custody. She tweeted,
set up trust companies (NY, SC, NV) will prob end up converting to a #Wyoming #SPDI so they can meet certain #SEC rqmts simply by nature of being a bank (such as good control location, among others). We knew the #SEC has a preference for banks over trust cos as #crypto…
Therefore, it might not be long before the actual ‘crypto-banks’ start competing in the Financial Services industry.
What do you think the existing banks will do to shun the competition? Please share your views with us. 
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Source: CoinGape

Regulation: US Legislators Debate New Crypto Rules

A bipartisan group of 20 US legislators in Washington has requested the Internal Revenue Service (IRS) to update its 2014 guidance on cryptocurrencies. The new update is expected to be made in the coming weeks.
In this new development, legal issues relating to the adoption and use of cryptos are particularly a point of interest, in which at least three bills are being considered for this purpose.

Brief History
Regulations in the US has never smiled at cryptocurrencies and its adoption in the region. And for the over 10 decades of existences of this set of digital assets, the US financial regulators have constantly enacted laws and regulations which widely restrict participation. Most recently, as Facebook aimed to bring cryptocurrencies to the public, it has met with regulatory obstacles, a result of which the proposed Libra project had to be halted.
With regards to Libra, Facebook had recognized the favorable framework of regulations in regions like Japan and Switzerland which prompted the social media giant to initiate the developmental process of its cryptocurrency in Switzerland. This, many US residents believe is a setback for the country in some ways.

“The concern I have is really about driving innovation out of the country,”

said Rep. Tom Emmer (R., Minn.), who led the congressional delegation that asked for the new IRS guidance.
The Unacceptable Bitcoin
Altho/ugh Bitcoin and other cryptocurrencies show great prospects and usability, they have also been able to gain disrespect among financial agencies which believe digital currencies like bitcoin are used and adopted for its anonymity of transaction and use especially among drug dealers and scammers. This explains why regulations are not the only issues faced with cryptocurrencies.
Not Everyone Is Happy
And not everyone in Congress like the idea. Last Tuesday, Rep. Maxine Waters (D., Calif.), chairwoman of the House Committee on Financial Services, asked Facebook to stop developing its Libra for the regulatory procedure to confirm its safety to the public, and global financial stability. The committee is set to hold a hearing on Libra later this month. According to spokesman Joshua Gunter, Facebook plans to work with legislators and attend hearings.
The Internal Revenue Service (IRS) in 2014 proposed to treat Bitcoin as an investment property in the same category as stocks or bonds. This subjected the crypto to capital-gain taxes and U.S. taxpayers were to report every gain or losses on the digital currency.
Legislators seem to have a different point of view. A bipartisan group of House members earlier this year suggested a law that would grant cryptocurrency a de minimus exemption as bonds and stocks. However, this Token Taxonomy Act would also exempt cryptocurrencies like bitcoin from being classified as security assets.

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Source: CoinGape

SEC Demands Blockchain Data From Providers To Improve Compliance, And Inform Policy

The U.S. Securities and Exchange Commission (SEC) is not backing down on its blockchain data policies. As a body which has been very pessimistic about blockchain efficiency and feasibility, SEC is now looking to narrow down its pessimistic approach towards the ecosystem and this time, how much data actually exist on the various blockchain is of significant interest.
Cryptocurrencies Vs Regulators
Cryptocurrencies lately have struggled to put their heads above waters under the watchful eyes of governments, financial agencies, and regulators seeking to either ban or restrict the blockchain in their respective areas.
One of the scapegoat projects that have recently jumped into rocky waters is Facebook’s Libra project. As at now, Libra’s development has been stopped and further developments are however uncertain.
SEC’s Data Requirements
The requirements listed by the SEC that all data is derived from hosted notes in the stead of blockchain explorers. The Bitcoin and Ethereum blockchains are important considerations, while others like Bitcoin Cash, Stellar, Zcash, EOS, NEO and XRP data are all specified as optional and therefore desirable. Also, as new blockchains gain increased recognition, the SEC would require support for them. The SEC wants total blockchain data from the original block or inception and information about any alternative currencies (tokens) connected with these blockchains.
What SEC Seeks To Achieve?
The SEC is popular for its various regulatory operations and activities on financial issues. As a matter of regulation, the SEC has made it a point of duty to alert investors about the dangers involved in purchasing securities and also to educate them on how to invest wisely. Lately, the SEC has gone widely against cryptocurrencies and have made several regulatory attempts at the industry, always looking to put this industry in check. This time, having a glimpse of what blockchain data contains and looks like will enable the commission to enact the regulations needed to really put the space under strict watch and control.
Required Data Format
The data style required is very particular with normalized regions for each included blockchain derived from on-node data, entirely. The least region indicated is ticker symbol; sending and receiving addresses; transaction stamp or hash, timestamp, and amounts; unspent send and receive balances; transaction fees; confirmations; block hash, and block height.
Possibly, the SEC also wants further metadata and chain metrics such as hashing algorithms and power, difficulty in mining and associated rewards, transactions values, size and quantity, coin supply and blockchain size.
The data, according to SEC should be provided directly by the vendor’s own node for each blockchain using a secure, digitally protected data feed; synchronized with the network; and run in a secure, controlled environment. The data must also be presented with a way to confirm its accuracy and completeness and meet the requirements of financial statement audit testing.
Application Deadline
The length of the contract is a period of 12 months originally which is followed by four consecutive 12-month terms which are optional. The application requires both a price and technical quote. Data vendors are expected by the SEC to submit an application by 12 pm EST on the 11th of July, 2019.
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Source: CoinGape

Blockchain Association to Oversee Spending of the Defend Crypto Fund

The Blockchain Association has taken over the “Defend “Crypto” fund setup to help finance the legal battle between Kik and the SEC. The social messaging firm has stated that it feels the money could be better put to use by the industry collectively.
Kik will take back the original $5 million it had donated to get the fund off the ground. The remaining money  be under the Blockchain Association’s care and will go towards protecting crypto assets.
Kik Donates Donations to Fight the Broader Crypto Fight
The social messaging firm originally founded the fund to help it finance its ongoing legal battle against the United States Securities and Exchange Commission.
The legal dispute centres on the initital coin offering the company ran in 2017. The securities regulator claims that the Kin tokens sold to investors are in fact legally classified as a security and therefore the offering was against the law since Kik did not register prior to the sale.
Meanwhile, Kik holds that its token is not simply an investment and is being used as currency by hundreds of thousands of users. The #DefendCrypto fund was established to help the firm argue this point in court and, if victorious, may well have helped to prompt the drafting of new legislation to define cryptocurrencies outside of existing legal regulations.
However, earlier today, Kik announced that it would be allowing the Blockchain Association to oversee the spending of the more than $2 million remaining in the fund. The reasoning stated for this was that crypto would be best defended as a collective.

The Blockchain Association takes over Kik's Defend Crypto fund to advance favorable ecosystem-wide crypto securities precedent https://t.co/lPUJbak0Fy #bitcoin #ethereum
— Erik Voorhees (@ErikVoorhees) June 28, 2019

From the announcement, it appears that the formation of the #DefendCrypto fund has sparked a dialogue between once-distant industry participants and that the community response from those also impacted by the lack of regulatory clarity in the US confirms that the issue is much bigger than Kik. The firm noticed that the problems impacting it were far from unique and that it would make more sense to distribute the money to those that need it more than an established company with deep pockets already.
Kik states that from today, the fund will be used to “support other projects fighting their own battles and litigation that impacts the broader crypto industry.”
For those that don’t know, the Blockchain Association is a Washing D.C.-based lobbyist group. According to its website, its stated goals are as follows:
“The mission of the Blockchain Association is to advance U.S. public policy for the crypto ecosystem. We believe policy should be made in an open rulemaking process or open legislative process, where ideas can be vetted, debated, improved upon, and anyone who is impacted can share their views. “
The members of the association are reportedly chosen by existing members based on their contributions to the digital asset industry.
 
Related Reading: A Second Chance With Ethereum For Those That Missed the Bitcoin Boat
Featured Image from Shutterstock.
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Maxonrow Joins the Blossoming Blockchain Industry in Kuala Lumpur and Taipei

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Maxonrow Joins the Blossoming Blockchain Industry in Kuala Lumpur and Taipei
One of the emerging blockchain firms in the space, Maxonrow, views the growth of blockchain in Southeast Asia as an opportunity to set a precedent of cooperation between government agencies and blockchain enterprises.
Maxonrow Joins the Blossoming Blockchain Industry in Kuala Lumpur and Taipei

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SEC Accepting Public Comments to Decide the Future of ETF Backed by Bitcoin and T-Bills

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SEC Accepting Public Comments to Decide the Future of ETF Backed by Bitcoin and T-Bills
The proposed rule change will allow Wilshire Phoenix Fund to list shares of ETF on NYSE Arca. SEC has declared that the public can comment on the aforementioned matter within 21 days’ time period.
SEC Accepting Public Comments to Decide the Future of ETF Backed by Bitcoin and T-Bills

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Source: CoinSpeaker

Binance Cuts Ties With Its US Customers, Does CZ Fear Being Arrested?

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Binance Cuts Ties With Its US Customers, Does CZ Fear Being Arrested?
Towards the end of last week, Binance, a leading cryptocurrency exchange in the world, announced that it would be blocking its US users. The move was manifested by a change in the exchange’s terms of service.
Binance Cuts Ties With Its US Customers, Does CZ Fear Being Arrested?

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Source: CoinSpeaker

Kik would need $10 to $20 million dollars if they intend to fight the SEC says Stephen Palley

Stephen Palley, a well-known lawyer in the crypto-space spoke to CNBC’s CryptoTrader Ran NeuNer and opined his views on the lawsuit against Kik by the SEC.
Kik’s issue with the SEC was made public when the company announced that they were planning to fight against the lawsuit brought forth by the SEC. The company has since raised approximately $5 million funds in crypto, to fight SEC.
Stephen Palley explained that the SEC had filed the case against Kik in a Federal Court for an ‘unregistered $100 million token offering in 2017’ and not securities fraud. Palley added:
“This is the first instance of the SEC actually going to a Federal Court and suing a token issuer for violating the registration provisions of the Securities Act of 1933.”
He added that all the other cases which have failed to register securities have been filed and settled in administrative courts. and that this was “pretty big news”. Palley further added that the SEC’s strategy on focussing with “failing to register security” was a “wise” move but also mentioned that “it is not an un-winnable case”.
Palley mentioned that Kik had already spent $5 million as seen on the “defend crypto” website even before going to court and that it would take them a lot more than that if the case were to proceed. He said:
“I don’t think that $5 million is enough… Defense lawyers for this sort of case can cause $1000 an hour sometimes more, depends on depositions, whether it goes to trial, how the appeal cost… it can easily cost $10 to $20 million. I don’t think $5 million will be enough if they intend to take this all the way through.”
Ted Livingston, the CEO of a Canadian-based messaging startup Kik opined that the SEC’s allegations were a “gross mischaracterization and misleading facts”. He also mentioned that they would take this all the way to the end.
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Source: AMB Crypto

SEC’s allegation against Kik is gross mischaracterization and misleading of the facts, says Ted Livingston

Recently, Ted Livingston, the CEO of a Canadian-based messaging startup, Kik, spoke about the reason they were being sued by the United States Securities and Exchanges Commission, in an interview for CNBC Crypto Trader. Livingston also spoke about the famous Howey Test and explained why it would not hold in this case.
Livingston was asked about the exact reason the commission was after Kik: whether it was for raising money via an ICO or for having “an instrument in circulation” that does not comply with the commission’s requirements. To this, the CEO stated that in the Wells notice, which they had received in November, the commission’s emphasis was on both the Kin tokens that were sold during the ICO, its current usage and tokens issued by Kin Foundation.
He went on to state,
“they don’t talk about anything to do with Kin being used to or anything to do with Kin foundation. It’s purely about the token sale in 2017. So, to me that’s exciting, they’ve backed down the idea that Kin, today, being used in dozens of apps by millions of people is a security, they made no comment on that today […]”
This was followed by Livingston speaking about another key factor pointed out by the commission, the firm telling investors that they could expect profits and its appliance to the Howey Test. He stated that this was not “what the Howey Test is”, adding that because an asset could become more valuable does not imply that it was a security.
[…] Just because a group of people have a common incentive, does not make it a security. The Howey test makes it very clear from the 1940s. So to us, the announcement is quite clear and that’s why we got excited when the DAO report came out, saying that the Howey test was the correct test […]
Further, he spoke about the commission’s allegation that the firm “enticed people to purchase a token” by asserting that it was a good investment and that it would grow in value.”
“I think this is a gross mischaracterisation and misleading of the facts. What we did is that we explained basic crypto-economics. The fundamentals of crypto is that you can issue a digital asset that has guaranteed scarcity.”
He went on to state that it was economics 101 that an asset that is scarce, and that which creates demand would become more valuable. He added that the team did not “promise anything”, adding that they could neither guarantee the value of Kin nor guarantee the demand of Kin.
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SEC continues to divide and conquer the whole industry, says Kik CEO Ted Livingston

Recently, Ted Livingston, the CEO of Kik, a Canadian-based messaging startup, shed light on the on-going case with the United States Securities and Exchanges Commission [SEC], in an interview with Ran NeuNer for CNBC Crypto Trader.
The discussion on the topic began by Livingston speaking about the first time the team was contacted by the United States regulatory authority. He stated that they first heard from the commission 3 days after the completion of their token sale, which was held over 18 months ago. He further stated that the initial interaction was a ‘friendly’ one, with the commission wanting to know more about what they were doing. He went on to state,
“Then, there were subpoenas and then testimony and finally they issued us what’s called the Wells notice, November last year. We issued our Wells response. We took both those things public in January and then finally we recently said what’s enough is enough, let’s go public. Let’s go to court.”
This was followed by the CEO speaking about whether they were expecting to be sued by the SEC. On this, Livingston stated that that they “weren’t sure”, adding that the one matter they were clear about was that the crypto-industry needed more regulatory clarity “one way or the other”.
He stated,
“we said to the SEC, ‘you’ve let us know that there’s infraction here. We’re going to tell the world that.’ So, one way or the other, you’re going to give us clarity here. Either you chose to go ahead or we’re going to fight this out in court and you back down and that in itself will be guidance.”
Further, Livingston was asked about their decision to go up against the commission. He stated that the commission originally had good intentions. However, he added that they have learned that the commission “continue[s] to divide and conquer the whole industry”, adding that everyone was “in this state of fear of what the SEC [would] think”.
He further stated
 “And at this point, this is having a real impact on our ability to compete on a global stage.”
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SEC’s complaint against Kik is based on ‘flawed legal theory,’ claims Kik Interactive’s General Counsel

Kik Interactive Inc., a messaging service, responded to the enforcement actions taken against it by the  U.S. Securities and Exchange Commission [SEC]. In a press release, Chief Executive Officer of Kik, Ted Livingston, said that they had been expecting this and now, they “welcome the opportunity to fight for the future of crypto.”
The CEO further added,
“We hope this case will make it clear that the securities laws should not be applied to a currency used by millions of people in dozens of apps.”
Kin token was launched in 2017, and has been adopted by various apps since, with such apps being popular among people. Livingston claimed that by the time of the trial, Kin token would be the most widely used crypto in the world. He added that the SEC’s actions would stand as a challenge, but it would not impact the use, transferability, and characterization of Kin.
The company further defended itself by saying that the SEC’s complaint against it was “based on a flawed legal theory.” Eileen Lyon, Kik’s General Counsel, listed the issues with SEC’s complaint and how they used the Howey Test “beyond its definition.”
“Among other things, the complaint assumes, incorrectly, that any discussion of a potential increase in value of an asset is the same as offering or promising profits solely from the efforts of another; that having aligned incentives is the same as creating a ‘common enterprise’; and that any contributions by a seller or promoter are necessarily the “essential” managerial or entrepreneurial efforts required to create an investment contract. These legal assumptions stretch the Howey test well beyond its definition, and we do not believe they will withstand judicial scrutiny.”
She further noted that the Wells Notice received in November 2018 was addressed to both Kik and the Kin Foundation. However, after reading the company’s Wells Notice, SEC decided to not name the Kin Foundation. Along with this, the SEC did not assert any claims based on Kin transactions that took place post the company’s 2017 pre-sale and token distribution.
“In our view, the SEC’s decision not to bring such claims acknowledges that the transactions currently taking place within the Kin Ecosystem do not fall under the federal securities laws.”
Even though the CEO claims that the SEC’s claims against the company present only a selective and misleading picture, it is expected that the whole story will soon be presented in court.
Apart from Kin, there are many other cryptocurrencies fighting to being considered as a security. Kin’s case may speed things up for such cryptos.
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Source: AMB Crypto

SEC vs Kik: SEC Brings up Fresh Charges Against Kik for $100 Million Unregistered ICO

Messaging App Kik is under fresh fire as the SEC has just published fresh charges against the company. The SEC is after Kik for conducting an unregistered ICO worth $100 million. According to a Press Release made available today, Kik has been sued for selling the tokens to U.S investors without proper registration and sale according to the U.S Securities laws.
Investors deprived of legitimate access to information
Kik conducted an ICO in 2017 which the SEC alleges was merely a way of recovering from previous losses in Kik’s business. Kik allegedly sold 1 trillion Kin tokens to a number of wealthy investors and raised $55 million from the sale. At the time, the company marketed Kin as an investment opportunity and promised to work towards creating a rising demand that would push its price up. However, the SEC claims Kin traded recently at a price half the original price at which the tokens were sold in 2017 at a discount.
Kik promised to create a Kin transaction service and a reward system for companies that adopt their product as a means of creating demand for the token. However, those services and companies it claimed to work with didn’t exist at the time of the sale, the SEC alleged. Kik also reserved 3 trillion Kin tokens for sale at a supposed time when prices go up. The offering involved securities transactions according to the SEC and Kik needed to comply with the registration requirements according to the U.S Securities laws.
The SEC is, therefore, charging Kik  Interactive Inc. with violating the registration requirements of Section 5 of the Securities Act of 1933 as well as denying investors access to critical information that would have enabled them to make “informed investment decisions” by violating those requirements. The Commission seeks a permanent injunction, disgorgement plus interest, and a penalty against Kik.
A pre-emptive strike?
The SEC had charged Kik with the same allegations shortly after the ICO in 2017. At the time, the company defended its token by providing answers to prove that Kin was a cryptocurrency, not a security and the SEC has been quite about the matter since then until last week when Kik created a $5 million fund to fight against the SEC for confusion concerning the status of cryptocurrency. A campaign known as Defend Crypto was launched which seeks clarification on which tokens are regarded as securities and which are currencies by demanding a new Howey Test for cryptocurrency.
Could the launch of the campaign be the reason behind the fresh allegations against Kik or is it a coincidence that the SEC is bringing up the allegations at this time?
Whatever is the case, Senior analyst at eToro, Mati Greenspan says Kik has the funding required to contend against the SEC in court, but a blockchain and virtual currency attorney Stephen Palley thinks it might be a tough battle for Kik as the commission apparently did significant research before filing the case.
what do you think will Kik succeed this time? Share your thoughts with us in comments.
 
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Source: CoinGape