During the ICO hype in 2017, Canadian messaging app Kik raised about $100 million in an ICO with the issuance of their Kin token. Only a few days after the closing of the ICO, the U.S. SEC reached out to Kik. The U.S. watchdog notified Kik last fall that it intended to pursue an enforcement action against both Kik and the Kin Foundation. However, Kik announced in the Wall Street Journal their plan to fight this out in court on behalf of the industry and challenge the U.S. regulator. The SEC approach would stifle innovation.
Crowdfunding for crypto defense
To do so the Kin Foundation launched the Defend Crypto (DefendCrypto.org) crowdfunding campaign to fund a potential court battle with the SEC, the Kik founder and CEO Ted Livingston announced on Laura Shin‘s Unchained podcast. Allegedly, Kik already donated $5 million to the campaign. Kik is encouraging other supporters donating cryptos that will be held in a Coinbase account and only be used once Kik’s $5 million has been spent. Unused funds will be allocated to “other initiatives.”
Fighting the ‘innovation tax’
According to the Defend Crypto campaign, the SEC has been shaping the future of crypto behind the scenes with settlements that set a dangerous precedent and stifle innovation.
Kin is unwilling to let that happen and is setting aside $5MM with Coinbase to take them on in court. But with the future of crypto on the line, $5MM might not be enough. That’s why we’re calling on others to contribute to the Defend Crypto fund.
Crypto Defend campaign (CryptoDefend.org)
The fight against the SEC and its “innovation tax” would thus not only be in the very best interest of Kik but for the greater good of the crypto industry, the Kik people argue. That the case would set a precedent for how cryptos are regulated in the U.S. Many other crypto firms face potential action from the U.S. regulator and hence Kik’s Defend Crypto campaign should be financed by the industry and its participants.
The DefendCrypto campaign is supported by prominent investors such as Fred Wilson of New York’s Union Square Ventures as well as major U.S. crypto companies such as Coinbase or Circle and ShapeShift.
It is my hope, and Kin’s hope, that DefendCrypto.org will be an inspiration for the many other important crypto projects that are silently battling with the SEC to come public and raise capital from the crypto sector for their fights.
Fred Wilson, Kik investor in a blog post
We think the Kik approach is actually appropriate. After the many fraud stories and regulatory violations in the course of the ICO Hype, a judicial clarification of the Kik matter could at least bring legal certainty to the US. This, in
