The Securities Exchange Commission filed a case against the Kik Messenger App for raising unregistered securities in the form of a cryptocurrency, Kin. According to SEC’s charges, Kik Messenger App was going through severe financial conditions before 2017 when it decided to conduct the ICO. This would be classified as a share issue to raise the capital within the company.
The Messenger App team raised money under their brand and even offered some at a discount initially. Hence, the SEC claims that the team must hold complete accountability of the funds like equity-based capital investment.
However, the developers of the App are defending the case on the fact that the token was designed to be used on the App by users; the company wasn’t directly involved in the utility. Hence, they stand by their claim of it being a cryptocurrency.