The Blockchain Association has called on the Southern District of New York court to avoid a summary judgement in the Securities and Exchange Commission’s (SEC) case against Kik, asking that due consideration be given to the messaging platform’s arguments. In an amicus brief, the Blockchain Association accuses the SEC of “attempting to leverage the concept of “integration” to sweep under the rug the important differences in Kik’s activities”, and has reminded the court that it risks casting a shadow over the entire blockchain industry if it oversteps its boundaries.
Kik’s Battle With the SEC
Kik and its founder Ted Livingston were at odds with the SEC even before the agency charged the company with an unlicensed sale of securities in June last year following the ICO for its cryptocurrency, Kin, a digital token to be used on the platform.
Livingston has been an outspoken critic of what SEC commissioner Hester Pierce has previously called “heel-dragging” by authorities with regard to cryptocurrency regulations, publicly stating his hope that the case will go some way to forcing the issue and benefit the industry as a whole.
Blockchain Association Wants “Appropriate and Limited” Approach
The Blockchain Association filed its amicus brief to Kik’s case on Monday, in which it acknowledges the fact that the Southern District of New York will be among the first courts in the country to decide on the nature of cryptocurrencies in respect to securities. To this end it is keen for the court to not reach a conclusion that extends beyond this specific case and impacts the industry as a whole:
Applying [the] Howey [Test] to the record evidence in this particular case — rather than issuing a broader ruling that might inadvertently put all cryptocurrency on trial — represents the appropriate and limited approach to the summary judgment motions before the Court.
The Blockchain Association notes that the blockchain industry is “a hundred-billion dollar industry that provides thousands of Americans with jobs”, adding further weight to the court’s decision. It also criticizes the SEC for the “limited guidance” it has offered on how to run an ICO, but that what it has said “differs drastically from its approach to this case”, adding that “the funding model challenged here is one consistent with and encouraged by the SEC’s own statements”.
