US Judge Says That Kik's Token Sale Violated Securities Law

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On September 30, a U.S. district judge for the Southern District of New York ruled that messaging app KIK’s $100 million token sale held in 2017 violated securities law.

  • The judge said that the KIK token met all of the criteria of the Howey test, which determines if an asset is a security or not.
  • He also rejects Kik’s defense that the term “investment contract” as being unconstitutionally vague as applied to Kik
  • The judge concludes by ordering that the two parties jointly submit a proposal for injunctive and monetary relief by October 20
  • The United States Securities and Exchange Commission (SEC) filed the lawsuit against KIK in June 2019, saying that the lack of registration “deprived investors of information”
  • Popular messaging app Telegram also faced trouble in the US, and was forced to end its blockchain project in May 2020

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