A new round of documents has been filed in the long-running dispute between the U.S. Securities and Exchange Commission, or SEC, and Kik Interactive Inc. over the courier company’s initial coin offering, or ICO.
Both parties are seeking summary judgment, and the SEC is filing a proposed order that it expects the court to sign.
However, Kik is confident that the judge will rule in its favor, saying that the Bitcoin System, Bitcoin Investor, Bitcoin Compass, Bitcoin Evolution, Bitcoin Lifestyle argument is based largely on building the Telegram case as a precedent.
Kik and SEC Oppose Each Other’s Motions for Summary Judgment
SEC Proposes Summary Judgment Order
The SEC filed a proposed order on May 8 describing its request for summary judgment that it hopes the court will choose to sign.
If signed, the order would find Kik guilty of violating U.S. securities laws by failing to register his public and private offerings with the SEC, citing Howey’s three-pronged test to argue that Kik’s tokens represented securities.
On the same day, Kik filed a memorandum in support of its motion for summary judgment, rejecting the arguments made by the SEC.
The Blockchain Association intervenes in the SEC’s case against Kik’s ICO
Kik Rejects SEC Motion
First, Kik argues that „the SEC cannot establish two of the three requirements of the Howey test: a joint venture and the expectation of profit from each other’s essential management efforts.
The company claims that its ICO comprised two separate offerings: a securities-free offering to reputable investors and a public ‚token distribution event‘ that sold utility tokens, emphasizing that token sales „involved different rights, different contractual arrangements, different buyers, and different consideration.
The filing also argues that the SEC places extensive and misplaced reliance on the recent injunction ordered in the regulator’s lawsuit against Telegram and precedent for the denial of Kik’s motion for summary judgment.
„Telegram involved a completely different set of facts and circumstances, so even the tentative conclusions reached at the preliminary injunction stage are irrelevant to this case,“ the motion says.
Telegram agrees to turn over its ICO documents to the SEC
The judge is expected to deliver his verdict next month
In statements to Cointelegraph, a Kik representative described the documents as „the last standard step in the process“.
„The judge will probably not rule for another 4-6 weeks,“ the representative added.
Kik’s general counsel, Eileen Lyon, told Cointelegraph that the SEC’s argument „is largely based on the recent Telegram case, which we believe was poorly reasoned and poorly decided.
„As you know, the Telegram case is not a binding precedent, so it will be interesting to see what impact it could have, in light of the many other authorities we have cited and the significant differences in fact in the two token offerings,“ she added.