The coronavirus has not slowed down the SEC's quest to go after companies that offered cryptocurrency ICOs. It is hard at work to take down all those who it believes sold "unregistered securities".
One of those is the messenger application Kik. This company managed to get itself in the agency's crosshairs by holding an ICO in 2017 to raise funds and establish a crypto-based platform.
This is a case many are following because the company behind the application refuses to back down or settle. To them, it is a matter of principle.
In the latest turn of events, the SEC is now objecting to Kik's use of the Blockchain Association which filed an amicus.
An amicus is a court document filed by a party that is not involved in the lawsuit yet can provide relevant information in the case. These are often 3rd parties that are in effect neutral to the proceedings.
The SEC claims that the Blockchain Association is far from neutral in this case and stands to benefit from a Kik victory.
While the association is not for profit, many of its member companies were involved in the basis of the suit.
Ultimately, this is battle for control. The SEC is doing the bidding to ensure that fundraising is the sole property of Wall Street. Only companies that are approved to sell securities may put together new offerings.
The drawback is obviously the expense in filing an IPO. Wall Street banks charge a fortune to take a company public, often making it difficult for smaller companies to tap into this segment as a source of funding.
It is interesting to see the defiance of the Canadian messenger company. They are willing to see this through to the end and no provide any ammunition for the SEC to use against other companies.
Eventually, the industry needs to be able to offer these types of funding on decentralized exchanges where the regulators are impotent.
Until that happens, we will see more actions like this.