Posted on

Kik Hands Off Defend Crypto Frund to The Blockchain Association

Kik is handing off its Defend Crypto fund to The Blockchain Association.

The Blockchain Association, a collective of advocates involved with the blockchain industry, has taken over the Defend Crypto fund set up by Kik

According to an official blog post on June 28, Kik — the company behind Kik Messenger and the kin (KIN) cryptocurrency — believes that the Blockchain Association “will be in the best position to objectively allocate the resources to the highest impact initiatives” and has chosen it to lead Defend Crypto.

The announcement also stresses that it will allocate resources for legal initiatives not just for Kik, stating:

“If we are going to Defend Crypto, we need to do it as a collective. So today we are announcing that going forward the Defend Crypto fund will be used to support other projects fighting their own battles and litigation that impacts the broader crypto industry.”

Kik, for its part, founded Defend Crypto in May and allocated $5 million to fight charges brought by the United States Securities and Exchange Commission in what Kik believes will be a precedent-setting case. 

Kik has reportedly raised an additional $1.6 million through Defend Crypto donations, which will be strictly allocated to these other non-Kik initiatives, in addition to a $500,000 contribution via the company’s supply of kin.

As previously reported by Cointelegraph, Kik allegedly made misleading claims to the SEC about its blockchain activity. Kik is said to have reported that its daily blockchain activity has been higher than those of ether and bitcoin, as well as having over 300,000 users making KIN transactions. According to Coin Metrics, however, many created accounts for Kin have never been used, and the blockchain’s all-time high for accounts holding over 10,000 kin has been 35,000.

Posted on

Kik’s Claims About Kin Blockchain ‘Inaccurate,’ Coin Metrics Report Alleges

Kik’s claims that its Kin blockchain had exceeded ether and bitcoin in terms of daily activity are being questioned in a new Coin Metrics report.

Kik has made inaccurate claims about activity on its blockchain to the United States Securities and Exchange Commission (SEC,) a Coin Metrics report alleged on June 24.

The report focused on two assertions made by the company about its Kin blockchain and eponymous cryptocurrency.

In a November 2018 letter, Kik had claimed that its blockchain had “exceeded Ether and Bitcoin in daily blockchain activity, demonstrating Kin’s wide acceptance and adoption.”

Coin Metrics claims daily operations, the measurement Kik used to gauge activity on its blockchain, included a high number of account creations — but many of these accounts were being left empty. Although Kin did have a large number of on-chain payments, the report said it fell “well below other major blockchains” in terms of transfer value.

Kik had also questioned why the SEC was regarding the token as a security when “over 300,000 people earned and spent kin as a currency.” On this second claim, Coin Metrics said there have only been about 35,000 addresses holding more than 10,000 kin (worth roughly $0.23 at press time) at its peak. The report added:

“This is orders of magnitude less than other blockchains in our sample, which each have at least 1,000,000 addresses that hold at least $1.”

Coin Metrics concluded that multiple metrics showed that Kin was not more widely used than dominant chains such as BTC and ETH, writing:

“It is therefore critical to examine multiple factors, including the type and quality of usage, in order to get a full picture of the activity on kin or any blockchain.”

Last month, Kik launched a $5 million crypto campaign to fund a legal challenge against the SEC to gain regulatory clarity.

The company had raised almost $100 million during a token distribution event in September 2017, but the regulator later claimed that Kik may have violated securities laws.

Posted on

Kik vs SEC – The Lawyers Speak

The SEC’s complaint against Kik, after it raised $100 million in an ICO, seemed pretty brutal, but not so fast, we’re only hearing one side of the story. Watch more here as three lawyers discuss the case, its merits and its potential impacts for the crypto industry as a whole.

Posted on

Kik vs SEC: The Lawyers Speak

The SEC’s complaint against Kik, after it raised $100 million in an ICO, seemed pretty brutal, but not so fast, we’re only hearing one side of the story. Watch more here as three lawyers discuss the case, its merits and its potential impacts for the crypto industry as a whole.

Posted on

Hodler’s Digest, June 3–9: Top Stories, Price Movements, Quotes and FUD of the Week

Tron CEO Justin Sun gets to lunch with Warren Buffett for $4.5 million, while Facebook’s coin may come out this month.

Coming every Sunday, the Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions, and much more — a week on Cointelegraph in one link.

Top Stories This Week

Mt. Gox’s Karpeles: “Press Rumors About My Blockchain Plans Are False”

Mark Karpeles, the former CEO of long-defunct Japanese cryptocurrency exchange Mt. Gox, denied press claims this week that he is returning to blockchain. Karpeles said that his activities with Tristan Technologies will not involve the cryptocurrency sector, as previously reported, and that the firm is not a startup and not related to blockchain. In comments to Cointelegraph, Karpeles said that he wasn’t “sure how this got reported wrong” and that his main goal is to “try to bring back Japan near the top of the IT industry.” A judge acquitted Karpeles of embezzlement in March and is currently appealing a lesser conviction of data manipulation, all in relation to the hack of Mt. Gox.

Picture 1

SEC Sues Kik for Conducting Allegedly Unregistered $100 Million ICO in 2017

Canadian startup Kik has been sued by the United States Securities and Exchange Commission (SEC) for an unregistered $100 million token offering. According to the SEC’s complaint, the commission alleged that Kik’s digital token sale was not compliant with U.S. securities laws, as it had not registered the offering with the proper authorities. The SEC’s complaint comes right after Kik’s recent announcement that the company is launching a $5 million crypto initiative to fund a lawsuit against the SEC, with a campaign called DefendCrypto. Steven Peikin, co-director of the SEC’s Division of Enforcement, said in a press release that, by conducting its kin token sale, Kik “deprived investors of information to which they were legally entitled and prevented investors from making informed investment decisions.”

Tron’s Justin Sun Wins eBay Charity Auction in $4.57M Bid to Lunch With Warren Buffett

Justin Sun, Tron founder and CEO, has won an eBay charity auction to have lunch with Warren Buffett, renowned investor and CEO of Berkshire Hathaway. In order to win the lunch, which Buffett has participated in for 20 years, Sun allegedly bid a record-breaking $4,567,888. The winner will be able to bring along seven friends to a New York steakhouse, and all proceeds from the auction go to San Francisco-based nonprofit Glide Foundation. Sun wrote in a statement that the bid was a key priority for the Tron and BitTorrent team. Buffett has long been known for his negative stance on cryptocurrencies, although he has made positive comments in regard to blockchain.

Picture 2

LocalBitcoins Confirms Removal of Local Cash Trades

Global peer-to-peer (p2p) crypto exchange LocalBitcoins officially confirmed this week the removal of trading in local fiat currencies. The Finland-based exchange had previously removed the cash trading option on June 1 with no announcement, which caused some outrage in the crypto community. In an official statement this week, the exchange noted that its liabilities are determined by the Act on Detecting and Preventing Money Laundering and Terrorist Financing, which requires them to follow certain regulations. The move comes on the heels of the news that LocalBitcoins will soon become monitored by the Financial Supervisory Authority of Finland, as the Finnish government passed new legislation for crypto assets earlier this year.

Report: Facebook to Announce Cryptocurrency Project This Month

Social media giant Facebook will reportedly announce its cryptocurrency project this month, and employees will be allowed to take part of their salary in the coin. According to unnamed sources, the white paper for the coin will be released on June 18. As well, Laura McCracken, Facebook’s head of financial services and payment partnerships for Northern Europe, said in an interview this week that the stablecoin would not only involve a U.S. dollar peg. Other media reports this week have noted that there are now 100 people known to be working on the crypto project via profiles on professional networking platform LinkedIn.
Winners and Losers

This week in the markets, bitcoin is below $8,000, trading at around $7,933, ether is at $245 and XRP at $0.41. Total market cap is about $253 billion.

The top three altcoin gainers of the week are posscoin, bitcoin 2 and hempcoin. The top three altcoin losers of the week are bzedge, pandemia and quantis network.

Market analysis

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

Most Memorable Quotations


“The unwillingness to allow more competitors to offer geared ETFs seems to be another example of denying or curtailing access to a product that would be useful to some investors.”

Hester Peirce, commissioner at the SEC

“What a difference it would have made a decade ago if blockchain technology on a private distributed ledger accessible to regulators had been the informational foundation of Wall Street’s derivatives exposures.”

J. Christopher Giancarlo, United States Commodity Futures Trading Commission (CFTC) Chairman

“I don’t think I’m a Neanderthal, which is what I’ve been called when I’ve said I didn’t want to own bitcoin.”

Stanley Druckenmiller, American billionaire investor

“I don’t recommend bitcoin in either direction because I don’t really care for it in terms of an asset, but I do care for it as a signalling mechanism that I think was a tip-off to this bounce in gold.”

Peter Boockvar, chief investment officer at financial planning and wealth advisory firm Bleakley Advisory Group

“My love for Japan has not changed. Japan used to be engineering superpower in terms of its PCs but right now, taking the cloud for example, it’s the U.S. that dominates. But I still believe in the potential Japan has and I would like to develop that.”

Mark Karpeles, former CEO of the now-defunct bitcoin exchange Mt. Gox

“The lack of financial inclusion is not a ‘bug’ of the traditional financial system. It’s a direct result of the regulatory architecture and the intermediaries policies.”

Andreas Antonopoulos, well-known bitcoin educator and crypto commentator

“I do not know what bitcoin is.”

Jair Bolsonaro, president of Brazil

Picture 3

FUD of the Week

Report: Polish Exchange Shuts Down and Disappears With Customers Funds

Coinroom, a Polish cryptocurrency exchange, has reportedly shut down its operations and disappeared with customer funds. While the total amount lost has not been disclosed, some users said that they had up to 60,000 zloty (around $15,790) in their accounts. Before ending its operations, Coinroom reportedly asked customers in an email to withdraw their money in one day, while in reality, customers have said that they were unable to get all of their money in this final withdrawal. A spokesperson for the district prosecutor’s office in Warsaw said that proceedings had been initiated against Coinroom for unregistered crypto payment services.

New Malware Campaign Spreads Trojans Through Clone Crypto Trading Website

According to Twitter user and malware researcher Fumik0_, a new website is spreading cryptocurrency malware. The aforementioned site reportedly imitates the website for Cryptohopper, a site where users can program tools to perform automatic cryptocurrency trading. After a user goes on the site, which displays the logo of Cryptohopper in an attempt to trick the user, it automatically downloads a setup.exe installer that will infect the computer once it runs. The installer infects the computer with an information-stealing Trojan, which then also installs two other Qulab Trojans for mining and clipboard hijacking deployed once every minute to collect data.

Report: Nearly $10 Million in XRP Stolen in GateHub Hack

Cryptocurrency wallet service GateHub said this week that hackers compromised almost 100 XRP Ledger wallets, resulting in the loss of around $10 million. In a statement, GateHub said that it was notified by community members of the loss of funds, following which it discovered increased application programming interface (API) calls coming from a small number of IP addresses. While one of those who warned GateHub about the breach reported that almost 13,100,000 XRP ($5.37 million) had already been laundered through exchanges and mixer services, GateHub has stated that the investigation is still ongoing.

Picture 4

Best Cointelegraph Features

The Land of the Free: Why Decentralization Matters in the Crypto Republic

After Tezos updated without forking and Iota introduced an ostensibly centralization-killing element, Cointelegraph examines the importance of decentralization by some of the large players in the crypto community.

Satoshi Posers — Why So Many Takers for the Bitcoin Crown?

With some anonymous Satoshi Nakomoto posers coming out of the woodwork, as well as one very not-so-anonymous Craig Wright, Cointelegraph looks at the potential motivations for claiming to be bitcoin’s father.

What Is a Satoshi, the Smallest Unit on the Bitcoin Blockchain?

In this analysis, Cointelegraph explains what exactly a “satoshi” is, why this buzzword has become popular recently, and who came up with the term itself.

Posted on

SEC Suggests Ethereum is Usable Currency Removing Securities Speculation


Ever since the SEC made its call on Bitcoin, deeming it not to be a security, there has been questions raised about other prominent cryptocurrencies. However, answers have not been forthcoming form the major American regulator.

Through a precedent setting case before the SEC at the moment, that of KIK, it can be deduced that the SEC considers ether to be a transactional currency, and certainly not a security. The leaning on Ethereum has always been towards not Labelling it as a security, but this lawsuit help to confirm that assertion.

KIK in the crosshairs, not ether

It is through the SC’s case with KIK, summing up that token (KIN) as a security, that it emerged that the SEC is not considering Ethereum a security.

The lawsuit states:

“Investors’ purchases of Kin were an investment of money, in a common enterprise, with an expectation of profits for both Kik and the offerees, derived primarily from the future efforts of Kik and others to build the Kin Ecosystem and drive demand for Kin. Consequently, Kik’s offer and sale of Kin in 2017 was an offer and sale of securities.”

The wording of the court documents go on to use US dollars and ether interchangeably, suggesting that they are similar in nature in the eyes of the SEC.

Clearing the air

In terms of the SEC classification, it is only Bitcoin and now Ethereum that have been fully cleared from the scope of the securities commission. This precedent laid out in the KIK lawsuit adds to SEC director William Hinman’s statement from June 2018, when he said Ethereum’s decentralized structure was such that it didn’t qualify as a security.

Later in the same year, SEC chairman Jay Clayton announced that Bitcoin was not considered a security by the commission. However, Clayton was not ready to wade into the mire of altcoins which had conducted ICOs in the past couple of years.

As is the case with many regulatory guidelines, they are mostly unclear and ambiguous as those in charge are still unsure of the space and not ready to make direct and damning legislation on the nascent technology.

However, by applying some of the SEC’s rational to other blockchains and coins, one could assume that the majority of Bitcoin forks would also avoid security status. It would cover the likes of Bitcoin Cash, Litecoin and other coins which weren’t born of an ICO, and contained no future promises of success to investors.

The post SEC Suggests Ethereum is Usable Currency Removing Securities Speculation appeared first on Ethereum World News.