SEC Negotiations Have Cost Kik $5 Million, Says CEO

Kik's CEO says the company has spent $5 million engaging with the U.S. Securities and Exchange Commission over what the regulator claims was an unregistered securities sale.

Kik, a messaging platform founded by Canadian entrepreneur Ted Livingston in 2010, raised $98 million in an initial coin offering at the end of 2017 to support its kin cryptocurrency and ecosystem.

The SEC later indicated the sale may have violated U.S. securities laws, and that SEC staff would recommend bringing an enforcement action against the company.

"We've spent a lot of money on this, over $5 million," he told CoinDesk.

In November 2018, the SEC filed a formal letter, known as a Wells notice.

In Kik's response to the SEC, the company highlighted a clause in existing law that says currencies are not securities, a comment Livingston echoed Thursday.

"In the last month alone, over a million people earned kin from 40 different apps, from 40 different companies. Over a quarter million people used kin, making it the most-used cryptocurrency in the world, and they're not even willing to say that's not a security."

While Livingston said he does not have any plans to sue the SEC for greater regulatory clarity, he did say the agency needs to provide clear guidance.

Regulatory uncertainty may be holding back the U.S. cryptocurrency industry, Livingston and others have argued during Blockchain Week.

Many companies may be afraid of regulatory action, with only one "No-action" letter issued by the SEC to date.