Ted Livingston, the CEO of Canada-based startup, Kik Interactive announced Monday that it will discontinue its messaging service, Kik, following its ongoing lawsuit with the U.S Securities and Exchange Commission (SEC).
The latest move as Livingston suggested is a direct impact of the SEC legal action against the initial coin offering (ICO) through which the startup raised $100 million in 2017 by selling KIN tokens to investors. He also blamed the lawsuit as the reason why the company conducted a mass layoff affecting that affected over 100 employees and their families at the start of this week. He then clarified what their plans are moving forward.
While Kik is entirely shutting down its messaging service, the CEO mentioned that their new focus would be to “ensure that KIN can scale to become the true currency of the internet going forward.”
According to him, “Kin has over 2,000,000 monthly active earners, and 600,000 monthly active spenders,” and “while losing Kik will have a big impact on these numbers, the continued growth of the Kin Ecosystem has more than made up for it.”
Livingston also explained that the new focus which will see the Kik team shrink to 19 people, will allow the startup to be more resistant to the resource-draining effect of its ongoing lawsuit with the SEC.
“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,” Livingston wrote in the update.
As Stmarket.co has reported in the past, Kik’s ongoing legal battle with the SEC centers on the regulators’ allegation that Kik's sale of Kin tokens in 2017 was a ‘securities’ sale, and as such should have been registered.
Kik on its part denied the allegations, claiming that the Kin token is a ‘currency.’ The startup has elected to fight the case in court and even raised $5+ million as well as money from the crypto community, with one eye on using the lawsuit to set the right legal precedent for the emerging industry.