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Kik Snubs Local Investors in ICO

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on Sep 8, 2017
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Canadian messaging app Kik Interactive expects to raise USD 125 million in its planned ICO but it will have to do so without the capital of local investors.

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Indeed, Kik Interactive wants to appeal to the investment masses with an ICO but is blocking Canadian nationals from participating. The reason for the snub is tied to the murky lines that Canadian regulators, specifically the Ontario Securities Commission (OSC), have drawn surrounding the governance of these new issues, which are unfolding fast and furiously.

Kik’s chief executive Ted Livingston characterized the guidance he received from the OSC as “weak,” further accusing the watchdog as failing to provide clear direction on whether or not Canadian securities laws will apply to the ICO. The only bit of guidance the OSC has offered is that it will take the treatment of ICOs on a case-by-case basis.

“To avoid risks arising from this uncertainty, we, a Canadian company, have decided to move forward without Canada,” according to Livingston in a blog post.  

Messaging app Kik boasts 15 million monthly users including 40% of American teens. The company wants to sell Kin tokens that can then be used for services on its platform in hopes of driving the price of the tokens higher.

The move comes as a blow to Canadian Prime Minister Justin Trudeau who is trying to attract top, young entrepreneurial tech talent to the country. Incidentally Trudeau’s half-brother Kyle Kemper is deeply engaged in bitcoin. Kemper recently retweeted a message expressing disappointment surrounding the exclusion of Canadian residents from the token distribution event (TDE).

Meanwhile, the lower 48 states this summer provided some degree of clarity on the treatment of digital currencies when the U.S. SEC deemed DAO tokens securities.

Of course Chinese regulators similarly made headlines in recent days when they decided to ban ICOs altogether, a move that drew harsh criticism but was also met with some expectation that the ban is a temporary measure until reasonable rules on ICOs can be formed.

ICOs have really taken both the investment and regulatory communities by storm, evidenced by a record near USD 800 million raised in Q2 alone, as per CoinDesk, bringing the year-to-date tally to USD 1.3 billion. The lack of clarity from regulators has cast a shadow on planned deals. 

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