Kik CEO Ted Livingston has announced the popular messaging app is shutting down. But the shutdown isn’t happening because of a lack of users or competition from other messaging apps. In a blog post, Livingston said Kik is shutting down so it can concentrate on its kin cryptocurrency that it’s created.
But why can’t the company keep the Kik messenger going and also work on kin? Livingston says the reason is that the Securities and Exchange Commission has been engaged in a battle with Kik over the kin cryptocurrency for 18 months. Livingston says the SEC has demanded Kik label kin as a security or fight them 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. So with the SEC working to characterize almost all cryptocurrencies as securities we made the decision to step forward and fight.
While we are ready to take on the SEC in court, we underestimated the tactics they would employ. How they would take our quotes out of context to manipulate the public to view us as bad actors. How they would pressure exchanges not to list Kin. And how they would draw out a long and expensive process to drain our resources.
Instead of selling some of our Kin into the limited liquidity that exists today, we made the decision to focus our current resources on the few things that matter most.
In short, Kik doesn’t have the financial resources to fight a court battle over kin and also keep Kik messenger running. As a result, the company is shutting down Kik, letting go over 80 staff (almost 80% of its workforce), and focusing on converting kin users into kin buyers.
By cutting its staff by 80%, Livingston says it will reduce its burn rate by 85%, enabling it to have the funds to fight the SEC in court:
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.
Together these changes will drop our burn rate by eighty five percent, putting us in position to get through the SEC trial with the resources we have.
Livingston did not give a date for when Kik will officially close its doors and shut down the app, but users of the messaging platform might want to start looking for another messenger now.
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