
Canadian crypto firm lays off staff over legal challenge
A cryptocurrency firm based in Canada, which is currently being sued by the US Securities and Exchange Commission (SEC), has announced it will fire most of its staff.
Kik, a social media firm, created a cryptocurrency known as Kin and sold it off during an initial coin offering, which is essentially the crypto equivalent of an initial public offering in other markets.
However, it has now been hit by the claims from the SEC that it went about its capital-raising processes illegally – and contravened laws which existed in the US to protect consumers.
The issue is believed to be centred on whether or not the token offered by Kik was a security.
There are also concerns raised by the SEC that crypto was a last-ditch attempt by Kik to raise some cash due to financial problems which emerged around the company in 2017.
This possibility was described by one news outlet as a “Hail Mary effort”.
As a result of the ongoing wrangling between the firm and the SEC, Kik said that it would fire over 100 staff members and go down to just 19.
The chief executive of Kik, Ted Livingston, also founded the company.
He said in an internet posting that the move came from a desire to protect the nature of Kin as a non-security – and that the firm would “step forward and fight”.
“After 18 months of working with the SEC the only choice they gave us was to either label Kin a security or fight them in court”, he wrote.
“Becoming a security would kill the usability of any cryptocurrency and set a dangerous precedent for the industry. So with the SEC working to characterize almost all cryptocurrencies as securities we made the decision to step forward and fight.”
The case continues.
However, Kik may end up liable to pay back large sums of cash which it acquired during its ICO if the SEC case is successful.
Busy week for SEC as other fraud case continues
The SEC was also involved in another alleged crypto fraud case this week.
It has charged a man name Jonathan Lucas, who operated an adult entertainment website, with claims that his initial coin offering was a scam.
Lucas ran Fantasy Market, and through that he earned around $63,000 from a hundred or so investors.
However, the tokens which he sold were not registered securities under the auspices of the SEC.
In a statement, the SEC alleged that Lucas “made numerous materially false statements in a whitepaper and online”.
They accuse him of lying about whether or not a beta version of the eventual platform for which the funds were being raised was ready to go.
He also allegedly told investors that a senior leadership team was in post – when in fact there was none.
Related Articles
- What Does Binance Being Kicked Out of Belgium Mean for Crypto Prices?
- Crypto Traders and Coin Prices Face New Challenge as Binance Gives up its FCA Licence
- Interpol Declares Investment Scams “Serious and Imminent Threat”
- Annual UK Fraud Audit Reveals Scam Hot-Spots
- Former Schwab, Wells Fargo, and Morgan Stanley Advisor is Sentenced to Seven Years
- FX Fraudster On The Run After £70m Ponzi Scheme Collapses
What Does Binance Being Kicked Out of Belgium Mean for Crypto Prices?
Crypto Traders and Coin Prices Face New Challenge as Binance Gives up its FCA Licence
Safest Forex Brokers 2023
Broker | Info | Best In | Customer Satisfaction Score | ||
---|---|---|---|---|---|
#1 |
![]() |
Global Forex & CFD Broker |
![]()
Best Trading Conditions
Visit broker
|
||
#2 |
![]() |
Global Forex Broker |
![]()
BEST SPREADS
Visit broker
|
||
#3 |
![]() |
Globally regulated broker |
![]()
BEST CUSTOMER SUPPORT
Visit broker
|
||
#4 |
![]() |
Global CFD Provider |
![]()
Best Trading App
Visit broker
|
||
#5 |
![]() |
Global Forex Broker |
![]()
Low minimum deposit
Visit broker
|
||
#6 |
![]() |
Global CFD & FX Broker |
![]()
ALL-INCLUSIVE TRADING PLATFORM
Visit broker
|
||
#7 |
![]() |
Global Forex Broker |
![]()
Low minimum deposit
Visit broker
|
||
#8 |
![]() |
CFD and Cryptocurrency Broker |
![]()
CFD and Cryptocurrency
Visit broker
|
||
|
Forex Fraud Certified Brokers
Stay up to date with the latest Forex scam alerts
Sign up to receive our up-to-date broker reviews, new fraud warnings and special offers direct to your inbox