Kik Messenger Shuts Down Amid Ongoing SEC Cryptocurrency Battle
Kik Interactive is closing its popular messaging app and laying off over 100 employees to survive an SEC lawsuit targeting its Kin cryptocurrency. The drastic shift reduces the company's burn rate by 85 percent as it prepares for a legal fight over whether Kin is an illegal security.
Kik Interactive CEO Ted Livingston announces that the company is shutting down Kik Messenger to focus entirely on its cryptocurrency, Kin. This decision comes as a direct response to an ongoing lawsuit filed by the Securities and Exchange Commission, which alleges that Kin's initial coin offering violates securities laws. The shutdown forces the company to reduce its workforce by over 100 employees, leaving a skeleton crew of just 19 people.
The dramatic downsizing reduces Kik's operational burn rate by 85 percent, allowing the company to afford the legal battle against the SEC. The regulatory agency claims that Kik's management knew the messenger app was running out of money back in 2017 and launched the $100 million ICO solely as a financial lifeline. Kik firmly denies these allegations, arguing that the SEC's portrayal of its finances is a deliberate attempt to mislead the public and prejudice the case.
Livingston states that the SEC effectively forces Kik to either accept a security label for Kin or fight in court, and the company chooses to fight to protect the broader cryptocurrency industry. He emphasizes that Kin does not rely on speculative demand because it is not listed on most major exchanges, but instead boasts two million monthly active users spending the token across dozens of independent apps. The company promises to share specific details regarding the timing of the messenger app's shutdown in the coming days.