March 9, 2025

Chronological Case for Kin as a Utility Token

2017–2020: The SEC’s Ear­ly Cryp­to Reg­u­la­tions and the Kik Case

  • July 2017 – The SEC issues the DAO Report, con­clud­ing that DAO tokens are secu­ri­ties under the Howey Test. This marks the SEC’s first offi­cial stance on ICOs, chill­ing the mar­ket.
  • Sep­tem­ber 2017 – Kik Inter­ac­tive launch­es an Ini­tial Coin Offer­ing (ICO) for Kin, rais­ing $100 mil­lion. It pitch­es Kin as a util­i­ty token for micro­trans­ac­tions with­in its mes­sag­ing app.

SEC ICO Crackdown (2017–2020)

Dur­ing the tenure of SEC Chair­man Jay Clay­ton (appoint­ed by Trump in May 2017), the SEC aggres­sive­ly pur­sued ICOs, view­ing many as unreg­is­tered secu­ri­ties. High-pro­file enforce­ment actions includ­ed:

  • Munchee (Decem­ber 2017) – The SEC shut down the $15 mil­lion ICO of Munchee, a food review plat­form, for unreg­is­tered secu­ri­ties offer­ings. The cease-and-desist order was issued with­out penal­ties, show­ing ear­ly reg­u­la­to­ry lenien­cy but a firm stance against ICOs that promised future val­ue appre­ci­a­tion.
  • Telegram (2019–2020) – The SEC sued Telegram over its $1.7 bil­lion Gram token sale, argu­ing it was an unreg­is­tered secu­ri­ty. A March 2020 fed­er­al court injunc­tion halt­ed the project, and Telegram set­tled in June 2020, agree­ing to return $1.2 bil­lion to investors and pay­ing an $18.5 mil­lion fine.
  • Kik (2019–2020) – The SEC sued Kik in June 2019, alleg­ing its $100 mil­lion Kin ICO was an unreg­is­tered secu­ri­ties offer­ing. The court ruled in Sep­tem­ber 2020 that Kin was a secu­ri­ty under the Howey Test, lead­ing to a $5 mil­lion set­tle­ment in Octo­ber 2020. How­ev­er, Kin was not required to reg­is­ter as a secu­ri­ty, allow­ing con­tin­ued decen­tral­ized devel­op­ment.

2021–2024: Kin’s Evolution and the Changing Crypto Landscape

  • 2021 – Kin migrates to the Solana blockchain, enhanc­ing scal­a­bil­i­ty and speed for micro­trans­ac­tions.
  • 2023 – The three-year SEC over­sight peri­od from the Kik set­tle­ment expires in Octo­ber 2023, free­ing Kin from reg­u­la­to­ry report­ing require­ments.
  • 2024 – Code Wal­let and Flipchat inte­grate Kin, enabling instant peer-to-peer trans­ac­tions for tip­ping and pay­ments, rein­forc­ing its util­i­ty token sta­tus.

January 2025: Trump Administration’s Crypto-Friendly Pivot

  • Jan­u­ary 21, 2025 – The SEC’s Cryp­to Task Force is launched under Act­ing Chair­man Mark Uye­da, led by Com­mis­sion­er Hes­ter Peirce. Its mis­sion is to cre­ate a struc­tured clas­si­fi­ca­tion sys­tem for dig­i­tal assets.
  • Jan­u­ary 23, 2025 – Pres­i­dent Trump signs an exec­u­tive order ban­ning Cen­tral Bank Dig­i­tal Cur­ren­cies (CBD­Cs) and man­dates a fed­er­al frame­work for cryp­tocur­ren­cy reg­u­la­tion, sig­nal­ing a shift toward pro-cryp­to poli­cies.

February 2025: The SEC Moves Toward Clarity

  • Feb­ru­ary 4, 2025 – Peirce out­lines the task force’s ini­tial pri­or­i­ties, includ­ing clas­si­fy­ing dig­i­tal assets (secu­ri­ties, com­modi­ties, util­i­ty tokens) and clar­i­fy­ing staking/lending rules.
  • Feb­ru­ary 21, 2025 – The SEC meets with indus­try lead­ers (includ­ing Michael Say­lor and CCI) to draft a cryp­to tax­on­o­my, cat­e­go­riz­ing assets into com­modi­ties, secu­ri­ties, sta­ble­coins, NFTs, and util­i­ty tokens. Kin is rumored to fit with­in the util­i­ty token cat­e­go­ry, though no offi­cial con­fir­ma­tion is made.
  • Late Feb­ru­ary 2025 – The SEC drops high-pro­file cas­es against Coin­base, Uniswap, OpenSea, Gem­i­ni, and Meta­Mask and paus­es its Binance law­suit, sig­nal­ing a shift toward rule­mak­ing over enforce­ment.

March 1, 2025: Kin’s Regulatory Position Strengthens

  • The SEC Task Force is in con­sul­ta­tion mode, gath­er­ing pub­lic input on reg­u­la­to­ry chal­lenges like asset clas­si­fi­ca­tion, cus­tody, and trad­ing.
  • The task force’s approach sug­gests a struc­tured path for util­i­ty tokens, open­ing the door for Kin’s offi­cial recog­ni­tion.

February 27, 2025: SEC Declares Most Meme Coins Are Not Securities

  • The SEC rules that most meme­coins (includ­ing Trump tokens) are not secu­ri­ties, mean­ing they do not require reg­is­tra­tion.
  • This rul­ing indi­cates that the SEC is dif­fer­en­ti­at­ing between spec­u­la­tive assets and those with real util­i­ty, sup­port­ing Kin’s case for non-secu­ri­ty clas­si­fi­ca­tion.

March 2, 2025: Trump Announces U.S. Crypto Strategic Reserve Including Solana (SOL)

  • March 2, 2025 – Pres­i­dent Trump announces plans for a U.S. Cryp­to Strate­gic Reserve via his Truth Social plat­form.
  • In his state­ment, he says: “A U.S. Cryp­to Reserve will ele­vate this crit­i­cal indus­try after years of cor­rupt attacks by the Biden Admin­is­tra­tion, which is why my Exec­u­tive Order on Dig­i­tal Assets direct­ed the Pres­i­den­tial Work­ing Group to move for­ward on a Cryp­to Strate­gic Reserve that includes XRP, SOL, and ADA.”
  • An hour lat­er, he fol­lows up with: “And, obvi­ous­ly, BTC and ETH, as oth­er valu­able Cryp­tocur­ren­cies, will be at the heart of the Reserve.”
  • This marks the first con­firmed pub­lic men­tion of spe­cif­ic cryp­tocur­ren­cies (Solana, XRP, ADA, Bit­coin, and Ethereum) in the reserve.
  • Reports from Coin­Desk, CNBC, and Forbes con­firm the announce­ment, not­ing that Solana (SOL) surged 15–22% fol­low­ing the state­ment.
  • His­tor­i­cal Con­text: Trump’s July 2024 Bit­coin 2024 con­fer­ence speech had hint­ed at a strate­gic Bit­coin reserve, but this announce­ment expands the scope to include U.S.-origin cryp­tocur­ren­cies like XRP and ADA.
  • Rel­e­vance to Kin: While Kin is not yet men­tioned, the pol­i­cy shift toward an “Amer­i­ca-first” approach to cryp­to reserves could favor Kin’s U.S.-developed ori­gins and real-world util­i­ty.

The Howey Test and Why Kin Qualifies as a Utility Token

Under the Howey Test, an asset is a secu­ri­ty if it meets all four of the fol­low­ing cri­te­ria:

  • Invest­ment of Mon­ey – Investors buy the asset with the expec­ta­tion of mak­ing a prof­it.
  • Com­mon Enter­prise – Prof­its are tied to a sin­gle com­pa­ny or entity’s efforts.
  • Expec­ta­tion of Prof­its – Buy­ers expect the price to increase due to oth­ers’ efforts.
  • Efforts of Oth­ers – The asset’s suc­cess depends on the man­age­r­i­al or entre­pre­neur­ial efforts of a spe­cif­ic group.

Why Kin Fails the Howey Test (and Should Not Be a Security)

  • No Cen­tral Issuer Promis­ing Prof­its – Kin is ful­ly dis­trib­uted, with no gov­ern­ing enti­ty con­trol­ling its future val­ue.
  • Func­tion­al as a Medi­um of Exchange – Kin is active­ly used with­in Code Wal­let and Flipchat, mak­ing it a trans­ac­tion­al util­i­ty token rather than an invest­ment vehi­cle.
  • No Reliance on a Sin­gle Enti­ty – The Kin Foun­da­tion no longer gov­erns the token, and its adop­tion is devel­op­er-dri­ven, not com­pa­ny-depen­dent.

Since Kin does not meet all four prongs of the Howey Test, it should be clas­si­fied as a util­i­ty token, align­ing with the SEC’s lat­est pol­i­cy direc­tion.

Conclusion: Kin’s Future as the SEC’s Model Utility Token

With the SEC’s cryp­to-friend­ly stance, Kin stands at the fore­front of becom­ing the first offi­cial­ly rec­og­nized util­i­ty token in the U.S.. If offi­cial­ly con­firmed, this will set a prece­dent for oth­er dig­i­tal cur­ren­cies and posi­tion Kin as a lead­ing decen­tral­ized cash exchange token for the future.

Cre­at­ed by: https://x.com/jdeaconx

John Deacon

John is a researcher and practitioner committed to building aligned, authentic digital representations. Drawing from experience in digital design, systems thinking, and strategic development.

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