The U.S. Securities and Exchange Commission has charged messaging app developer Kik Interactive with conducting an illegal $100 million initial coin offering in a case that could clarify whether digital tokens are securities.

The SEC said in a civil complaint filed on Tuesday that Kik violated securities laws by failing to provide a registration statement for its ICO, thereby depriving investors of important information about the investment opportunity it was promoting.

The Canadian company raised $100 million in 2017 by selling one trillion “Kin” tokens to both wealthy investors and the general public. According to the SEC, Kik “enthusiastically described” the offering and its plans to develop a digital platform for buying goods and services.

“By selling $100 million in securities without registering the offers or sales, we allege that Kik deprived investors of information to which they were legally entitled, and prevented investors from making informed investment decisions,” Steven Peikin, co-director of the SEC’s Division of Enforcement, said in a news release.

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But Kik said the SEC’s case is based on a “flawed legal theory.”

“We hope this case will make it clear that the securities laws should not be applied to a currency used by millions of people in dozens of apps,” CEO Ted Livingston said in a statement.

The Kik offering was among the biggest ICOs in the past two years, with $49 million raised from investors who bought Kin tokens at a discount and the remainder coming from the public. The tokens traded recently at about half of the value that public investors paid in the offering, the SEC said.

As Fortune reports, the commission “has been sounding the alarm over ICOs for years, arguing that the sales are likely securities that must comply with federal rules.” In its complaint against Kik, it notes that courts have interpeted the term “investment contract” expansively.

Kik has said its tokens have been used as a currency to buy physical goods like sunglasses as well as for purchases in more than 30 apps. But the SEC said that when Kik distributed Kin in September 2017, “no one — not even Kik — offered goods or services in return for Kin.”

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