Instant messaging app provider Kik Interactive has handed over the responsibility of managing its cryptocurrency legal fund to the Blockchain Association, according to an announcement Friday.
The fund, called Defend Crypto, with over $2 million of residual assets currently, was set up by Kik to help fight legal battles in the cryptocurrency industry.
Kik itself has been fighting a battle with the U.S. Securities Exchange Commission (SEC) over its kin tokens. Back in 2017, Kik raised $100 million in an initial coin offering (ICO) via the tokens. The SEC believes the company issued unregistered securities.
In a recent court order, the regulator described Kik's messenger business as “has never been profitable.” The SEC further said that the firm's ICO was viewed as a “hail Mary pass” by one of its board members to breathe new life into the business by raising new capital.
Lawyers recently told The Block that the SEC has a solid case, but Kik is preparing its own argument in response, questioning whether its token sale falls under the agency’s jurisdiction.
“We believe that the crypto industry should constructively engage in the legal process when they have the potential to have an impact that goes beyond the parties to the case,” the Blockchain Association said in Friday’s announcement, adding:
“As the fund is transitioned, we will determine the best way to structure the fund, governance policies, how to raise additional funding, and criteria for determining when to use the funds.”