After it was made public that the crypto subsidiary of Kik Interactive was going to dismiss dozens of employees, the instant messaging mobile app itself announced that it would be ceasing operations, through its Chief Executive Officer Ted Livingston.
The piece of news was reproduced over the web via a blog post by the firm itself. Livingston explained that Kik Interactive was forced to close its doors because of a current lawsuit started by the U.S. Securities and Exchange Commission (SEC.)
“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. So with the SEC working to characterize almost all cryptocurrencies as securities we made the decision to step forward and fight,” Livingston explained.
Only 19 Core Developers
Not only is Kik closing down the doors of its messaging app, but also, the firm will reduce crypto-related operations to only 19 core developers, in an attempt to promote the use and adoption of the company’s crypto asset, KIN.
Livingston detailed that Kin “has over 2,000,000 monthly active earners, and 600,000 monthly active spenders. Whilst losing Kik will have a big impact on these numbers, the continued growth of the Kin Ecosystem has more than made up for it.”
The issue between Kik and the SEC actually started over a 2017 initial coin offering (ICO) of the KIN crypto asset. The initiative managed to raise $100 million, but the financial watchdog stated that it was an unregistered securities offering, thus it was not legal.
A Direct Impact on KIN’s Price
Those allegations came in June, and unfortunately for KIN holders, they have had a direct impact on the cryptocurrency’s price: from that moment, it has collapsed from $0.000036 to $0.0000105 as of the moment of writing this piece, per Messari’s data.
Regarding Kik’s decision to shut down the Kik Interactive instant messaging app to shift the company’s focus towards the development of the crypto asset, Livingston said that “Kin is a currency used by millions of people in dozens of independent apps. So while the SEC might be able to push us around, taking on the broader Kin Ecosystem will be a much bigger fight. And the Ecosystem is close to adding a lot more firepower.”
The news about the mass dismissals at Kik’s crypto subsidiary was first reported by Calcalist, a site from Israel. The publication also provided the details about the company’s restructuring process, something that was later confirmed on the Kin Foundations’s official space on Reddit. A spokesperson said: “I can confirm a restructure is happening.”
The Kik Messenger
The Kik Messenger is a freeware instant messaging platform for mobile devices, developed by Kik Interactive, a company based in Canada. It could be obtained by iOS and Android users, and it allowed users around the world to write text, send videos, photos, sketches, mobile pages, and other content.
Kik is famous around the industry for its focus on protecting user anonymity. It is one of the few services that allows people to register without having to provide a phone number.
By Andres Chavez