The Canadian corporation would have to pay a penalty of $5 million in its proposed judgment. In June 2019, the US SEC declared its charges against the company Candian, accusing it of undertaking an unauthorized $100 million sale of shares in an ICO.
In 2017, the Canadian firm Kik, best known for its online messaging service, carried out its ICO, earning $100 million. The Kin tokens’ selling was illegal, according to the SEC, as the firm had not declared them as securities. Although Kik spiritually battled the allegations, last month, a
New York judge ruled in favour of the SEC.
New York Judge Alvin Hellerstein ruled that by selling the unregistered Kin tokens, Kik breached security rules. The court then ordered the two parties by October 20 to develop a proposed injunctive and monetary relief judgment.
The SEC and Kik have tabled the proposed judgment in the latest progress. It would indefinitely enjoin Kik from committing further violations of the Securities Act of 1933 if accepted by the court. It also demands that Kik pay a $5 million penalty. The chief of compliance of the SEC Cyber Unit, Kristina Littman, warned any companies that issue securities against doing so without complying with securities laws.
She further noted that issuers intending to use stock markets to capitalize on their companies do not evade federal securities laws’ registration provisions. The decision of the court accepted that Kik was involved in a single, fraudulent offering of securities.