I think it won't be such a cut-and-dry case to say that a token, given for free, without any promises of dividends or equity, run on a decentralized network, is a straightforward security which should be registered and regulated by the SEC. The Kik case may be a security but other cryptos are nowhere near as clear.
Yes but I suppose that’s the risk Kik is taking for the entire industry whether the rest of crypto is ready or not. A bunch of judges who hardly understand what cryptocurrency is, let alone how it works, will very likely come up with a new test to determine whether a digital asset is a security. That test might be very narrowly tailored to the specific facts and circumstances of the kik case or it might be very broadly constructed so as to sweep in far more tokens than even the SEC intended. Rather than simply waiting for the SEC and industry to organically work through the confusion Kik is taking a big legal risk because their back is against the wall. But the risk they’re taking has the potential to negatively impact many others.
I’m hopeful that, whatever the outcome for Kik, Congress will amend the definition to provide everyone with some clarity one way or the other.
