Messaging app Kik closes down as it battles SEC lawsuit over its cryptocurrency plans

to participate in a highly hyped wave of ICOs, or Initial Coin Offerings, a way of raising funds from investors for digital currency projects that are typically less regulated than traditional investment methods., accusing it of violating US securities law by not registering its ICO.

"By selling $100 million in securities without registering the offers or sales, we allege that Kik deprived investors of information to which they were legally entitled, and prevented investors from making informed investment decisions," Steven Peikin, co-director of the SEC's Division of Enforcement, said in aat the time."Companies do not face a binary choice between innovation and compliance with the federal securities laws.

While the SEC alleges that the token sale was in violation of securities laws, Kik argues that its digital token is not a security. "After 18 months of working with the SEC the only choice they gave us was to either label Kin a security or fight them in court. Becoming a security would kill the usability of any cryptocurrency and set a dangerous precedent for the industry. So with the SECKik did not immediately respond to Business Insider's request for comment.

"While we are ready to take on the SEC in court, we underestimated the tactics they would employ. How they would take our quotes out of context to manipulate the public to view us as bad actors. How they would pressure exchanges not to list Kin. And how they would draw out a long and expensive process to drain our resources," Livingston added.

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