The CEO of the popular messaging app Kik, Ted Livingston, said that the token they are working on will become super valuable. These comments might not help the project’s plans to become one of the most used digital currencies in the market. The information was first released by The Block a few hours ago.

Some time ago, the U.S. Securities and Exchange Commission (SEC) sent Kik a ‘Wells Submission’ after violating securities regulations. Kik held and Initial Coin Offering (ICO) that gathered around $100 million.

A few days ago, Mr. Livingston announced he would fight the decision that was taken by the SEC regarding Kik’s ICO plans. Before the pre-ICO, in 2017, Ted Livingston was filmed in a Q&A event saying things that would harm the company’s plans to effectively avoid being considered a security.

During the Q&A session, Livingston was asked whether the tokens were going to be considered securities under the US federal law.

“Turn the cameras off. That’s going to haunt me one day. I hope not. […] Honestly, part of that is… making sure there is utility… there’s huge utility for this. I don’t think that’s a question… I also just sort of fundamentally, philosophically don’t think this is a security. A security is, you own a piece of a revenue-generating entity. Future dividends is where it came from, etc. whereas here it’s like you just literally own an asset, and if demand for that asset goes to zero, then the value of that portion of the asset you hold also goes to zero.”

The U.S. lawyer Stephen Palley said that Mr. Livingston does not seem to be aware of what a security is. As he explains, a security is an investment in a specific company with an expectation of profits by the efforts of the promoter or just a third party. Additionally, the utility of a specific token is relevant but not the only thing to take into account.

The ‘Howey Test’ is applied to tokens and other asset classes to understand which is the nature of an investment. There are four important things that the Howey Test analyses:

The value of the asset increases by the effort of others.

If a specific token falls into these categories, the SEC could take enforcement actions against this coin and project. In the video released, Livingston mentioned that they are expecting profits from this ICO and their token.

In this video, Livingston commented:

“We’re gonna put [the Kin cryptocurrency] inside Kik and it will become super valuable on day one, we think.”

Kin is the cryptocurrency that they are currently developing and that they aim at implementing on the Kik ecosystem. However, as the comments come from the CEO of the company that is currently offering the asset, this looks that people should be expecting for a profit.

The U.S. Securities and Exchange Commission has already announced enforcement actions against other ICOs accused of selling unregistered securities.

At the time of writing this article, the Kin token is the 131st largest digital currency in the market. Each coin can be purchased for $0.000026. Back in January 2018, each Kin coin could be purchased for $0.001306. It also has a market capitalization of $19.4 million.

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