Kik Interactive is shutting down the Kik Messenger to focus on the Kin cryptocurrency. This is according to a blog post published by its CEO Ted Livingston.
Kin has notably been targeted with a lawsuit filed by the U.S. Securities and Exchange Commission (SEC), which claims Kik raised millions through an illegal initial coin offering (ICO) by selling a security. Kik is however saying that Kin isn’t a security.
In the blog post Livingston says the SEC gave Kin two choices: admit it was a security and kill its usability, or fight the regulator in court.
After 18 months of working with the SEC the only choice they gave us was to either label Kin a security or fight them in court. Becoming a security would kill the usability of any cryptocurrency and set a dangerous precedent for the industry.
Kik decided to go to court with the SEC even though it “underestimated the tactics they would employ.” Livingston alleges the regulator would come to “pressure exchanges not to list Kin” and “draw out a long and expensive process to drain our resources,” as well as “manipulate the public to view us as bad actors.”
The CEO said the team chose to use the resources it has to focus on “converting Kin users into Kin buyers,” instead of dumping the cryptocurrency it has into the market. As a result, the company announced it’ll be shutting down the Messenger app, and reducing its headcount to 19.
These are hard decisions. Kik is one of the largest apps in the US. It has industry leading engagement and is growing again. Over 100 employees and their families will be impacted. People who have poured their hearts and souls into Kik and Kin for over a decade.
The move is set to drop the organization’s burn rate by 85%, allowing it to continue fighting the SEC.