The Kin Foundation that’s behind the social messaging app Kik has been involved in a long-drawn out legal battle with the US Security and Exchange Commission over the distribution of its Kin token.
Kik created the Kin token back in 2017.
The SEC alleged that Kin tokens fall under a Security bracket, and thus it must be registered with the regulatory body before the sale. The total market supply of Kin token has been kept at 10 trillion out of which 1.45 trillion are currently in circulation.
The Kin Foundation has now released a transparency report in association with the Messari group revealing crucial financial details. The transparency report was published on the 21st of May, and gave a glimpse at the operation of the Kin token.
The report revealed that the foundation drafts their budget one year in advance, which determines what funding would go towards developers, user grants, node incentives, and marketing and operations.
The Kin Foundation is currently headed by a two-member board consisting of Ted Livingston, the CEO of Kik Interactive and William Mougayar, author of “The Business Blockchain.” The report further revealed that the board members are selected annually by the members along with a Kin Representative who acts as a medium for the developer community and token holders.
The foundation currently has only one Representative in the form of Matt Hannam, however, the foundation plans to add a couple more representatives in the coming year. The Kin foundation also comprises of an informal community of 10 members who look over the kin rewards and disagreements.
The report revealed that around 28 million users have acquired kin from various sources since its creation in 2017 and around 300 million kin was spent per day this year alone.
The Legal Battle Over Security Tag
The United States is counted among nations with a tough regulatory stance towards crypto. This is because any security token offering which promises a profit on the token over a course of time need to be registered with the SEC. The same issue has led to the halt and several postponements of Telegram’s TON blockchain and GRAM token issuance. The Kin Foundation has maintained, since the beginning that,
“the SEC cannot meet its burden to prove that Kin purchasers were primarily led to expect profits from the managerial efforts of others.”
The foundation also believes that the SEC’s legal case against them is heavily inspired by the Telegram case. Eileen Lyon, Kik’s general counsel said:
“Our take on the SEC’s opposition is that it relies heavily on the recent Telegram case, which we think was poorly reasoned and wrongly decided.”