Kin, the cryptocurrency project launched by the firm behind the messaging application Kik, has asked the crypto asset space for donations to fund a potential legal battle with the US Securities and Exchange Commission. The firm is hoping that such a lawsuit will help to clarify the legal position of many digital currencies that were launched by initial coin offering (ICO).

Kin has already put up $5 million worth of crypto, comprising of their own tokens, along with Ether and Bitcoin. If the firm gets a ruling in its favour, the hope is that the regulatory body will be forced to come up with a new method of judging whether crypto tokens are to be deemed securities or not.

According to Ted Livingston of both Kik and Kin, the lack of clarity surrounding crypto regulations is starting to seriously hinder both his own company and the industry at large. Since the popular messaging application Kik launched its own ICO in 2017, the firm has been left guessing as to whether or not its token would be deemed a security by the regulatory body.

Kin has been in a back-and-forth with the SEC for 18 months now. Following the ICO, the SEC stated that it intended to pursue an enforcement action against it. However, rather than simply settle away from court, as many firms targeted by the regulatory body have done previously, Kin responded by refuting the SEC allegation that the ICO it held in 2017 was an unlicensed securities offering.

The firm has received multiple subpeonas and a Wells Notice and, despite rising economic activity on the network – applications being developed and monthly users rising enough to make the project one of the most-used in all of crypto – the firm is still not sure whether its entire business model will fall to pieces if Kin tokens are deemed securities.

Kin itself has started the fund with $5 million and is calling on other “projects or individuals” to also donate. The fund is being hosted by Coinbase Custody and has the backing of several big names from the digital asset space, including Circle, ShapeShift, and Messari.

Livingston appeared on the Unchained Podcast to discuss the DefendCrypto idea earlier today.

Today on Unchained @ted_livingston spoke with @laurashin about the issues with the SEC and the desperate change we need to see to keep this industry thriving.https://t.co/6Ux203ESAw

— Kin Foundation (@kin_foundation) May 28, 2019

There he stated that he does not feel that the current way of determining whether a digital asset should be subject to traditional securities laws is appropriate for crypto. For this reason, the DefendCrypto fund has been launched.

According to the project’s website:

“The SEC has been shaping the future of crypto behind the scenes with settlements that set a dangerous precedent and stifle innovation.”

Livingston stated on Unchained that he felt that if Kin won against the SEC, a new method to determine whether a crypto token was a security in the eyes of the law. would need to be devised. This would see the existing Howey Test replaced with something more appropriate to digital currencies.

However, don’t expect any of this to unfold anytime soon. Livingston thinks the battle is likely to take years, which is hugely detrimental to the US going forward since promising startups working in the space are likely to relocate to the likes of Switzerland or Malta, where regulations are much more favourable. He stated:

“Someone says, ‘Wow, Kin, great idea. Let’s do that everywhere — except in the United States.'”

Related Reading: Crypto is Rapidly Maturing: How Gemini is Legitimizing the Sector

The post Kin Appeals to Crypto Space for Help with Legal Fees to Fight SEC for Regulatory Clarity appeared first on NewsBTC.

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