In the wake of the Security and Exchange Commission’s (SEC) enforcement action against Kik and the Kin initial coin offering (ICO), it appears that Coinbase’s name, as well as Circle’s, has been scrubbed from the list of supporters on the DefendCrypto website.
DefendCrypto was concocted by Kik to raise additional capital in its fight against the SEC’s allegations the Kin ICO was the issuance of unregistered securities. Kik has rallied crypto stalwarts seeking to better define the issuance of tokens which are not considered to be securities.
In the SEC’s complaint, the Enforcement Division made it clear that the manner of sale played an important role in its decision to sue the firm. It has been widely reported that Kik promoted the ICO as generating returns for investors.
The allegation that Kik pitched its ICO as an investment, combined with the fact that the ICO took place after the DAO report, is widely viewed as undermining Kik’s defense.
Kik still lists staunch crypto supporters; Shapeshift, Messair, Arrington XRP Capital, and Fight for the Future as backers.
Some industry insiders have shared they would be more supportive if the fund was a general defense fund and not just for Kik’s defense.
To date, DefendCrypto has raised about $4.3 million. Kik claims to have already spent $5 million of its own money (it raised about $100 million in its ICO). An extended legal fight with the SEC may cost tens of millions of dollars.
As for Coinbase/Circle, the companies may just be keeping their powder dry seeking a better battle to fight – if at all. One should note, that Coinbase is still listed as the wallet of preference for any crypto donations.
— Mike Dudas (@mdudas) June 4, 2019