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It was recently announced that the U.S. Securities and Exchange Commission (SEC) would be suing Kik (KIN) for its $100M unregistered initial coin offering (ICO) from 2017. Kin has attempted to make this a rallying call for the cryptocurrency community with its site DefendCrypto.org. However, Coinbase and Circle have seemingly pulled their support of the project.
Kik has been waging a fight against the SEC, claiming that that the agency is ‘punishing’ them for innovation. Previously, its site, DefendCrypto.org, featured two prominent supporters: Circle and Coinbase. However, Mike Dudas pointed out, they have now mysteriously disappeared from the website.
— Mike Dudas (@mdudas) June 4, 2019
So far, Kik has raised $4.3M from the proceeds of its ‘Defend Crypto’ campaign. The entire effort was likely bolstered by support from major cryptocurrency firms like Coinbase. However, it appears that the ‘movement’ is now losing steam.
Kin is trying to make this SEC lawsuit a watershed moment for the cryptocurrency industry. However, the actual motivations behind DefendCrypto.org are far less noble.
The SEC claims that Kik held an ICO in 2017 as a flagrant cash grab because it was losing money on its messaging platform. Its users were dwindling and it was operating at a loss. To cover these losses, Kik held a $100M ICO.
In 2018, Kik also launched an app on the iOS store where one could fill out surveys and be rewarded with Kin. This Kin could be exchanged for various gift cards chosen through the app. However, in just a few weeks, it was clear the project was insolvent, no more gift cards were being given out, and Kin was plummeting in value.
It’s clear that Kik has always had a losing profit model. Even worse, it is now trying to save itself one last time by making it seem like the SEC is pursuing a crusade against the broader cryptocurrency community.
When put in context, one can easily see why Coinbase and Circle dropped out. This is not about ‘saving’ crypto, this is about saving Kik from bankruptcy.
Do you think Kik is using DefendCrypto.org opportunistically? Let us know your thoughts below.
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