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