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The SEC alleges that Kik's $100m token sale was illegal, but Kik this week filed a lawsuit against the SEC alleging the SEC is “twisting” the facts. The SEC claims that Kik's move was to raise money to save the company, but Kik says it should be viewed as a bold business decision to beat competitors.
The SEC alleges that the token sale, announced in 2017, came at a time when the company had predicted that it would run out of money after Kik Messenger had been losing money for years, and that it then used proceeds from that sale to build an online marketplace for the app. In the filing, Kik’s legal team denied that charge, claiming that the SEC’s allegations about its financial condition “is solely designed for misdirection, thereby prejudicing Kik and portraying it in a negative light” and that Kik began working on a cryptocurrency-based model after exploring monetization options that would help it compete against larger tech companies.
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