Kik Interactive to pay $5M penalty to SEC, according to proposed judgment
The United States Securities and Exchange Commission (SEC) today submitted a proposed final judgment in its case against Kik Interactive.
Let’s recall that the Commission launched an action against Kik Interactive Inc. back in June 2019. The company was charged with conducting an illegal $100 million securities offering of digital tokens. The SEC alleged that Kik sold the tokens to U.S. investors without registering their offer and sale as required by the U.S. securities laws.
According to documents filed today with the New York Southern District Court and seen by FX News Group, the SEC and Kik Interactive have reached agreement on a proposed judgment. The proposed Final Judgment, if approved by the Court, would:
- permanently enjoin Kik from committing future violations of Section 5, pursuant to Section 20(b) of the Securities Act of 1933, 15 U.S.C. § 77t(b);
- impose a conduct-based injunction, as set forth in the proposed Final Judgment, under Section 21(d)(5) of the Securities Exchange Act of 1934, 15 U.S.C. § 78u(d)(5); and
- require Kik to pay a penalty of $5 million, pursuant to Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d).
Let’s also note that, under the proposed judgment, with respect to the three trillion Kin tokens issued by Kik Interactive to itself on September 26, 2017 and any new “cryptocurrency,” “digital coin,” “digital token,” or similar digital asset issued or transferred using distributed ledger technology (the “Covered Assets”), the company, for a period of three years beginning on the date of entry of the Final Judgment, shall give to the Commission 45 days’ notice before Defendant participates, directly or indirectly, in an issuance, offer, sale or transfer of any Covered Asset.
The proposed Final Judgment would conclude this action.