Canadian company Kik Interactive has decided to shut down its messaging platform Kik to completely focus on its digital currency Kin, Ted Livingston, the CEO of the company, revealed on Tuesday.
To completely dive into the crypto project, the company is also cutting its workforce from over 100 employees to mere a team of 19 people. This, according to Livingston, will reduce the company’s cash burn-out by 85 percent.
“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,” the CEO noted. “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.”
A $100 million ICO categorizing securities tokens
In early 2017, Kik raised $100 million by selling Kin token institutional and retail investors. Out of the total raised money, $55 million came from investors based in the US. This raised the alarm to the Security and Exchange Commission (SEC) which initiated an investigation on the project for violating securities law.
After a few notices and testimonials, the US regulator finally brought in a lawsuit against the token sale of Kik, alleging Kin falls under the category of securities.
“Kin operates on an open, decentralized infrastructure run by a dozen independent companies. Kin is a currency used by millions of people in dozens of independent apps,” Livingston noted. “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.”
Per the CEO, there are over 2,000,000 active monthly earners of KIn along with 600,000 monthly active spenders. Though the shut down of Kik will impact these numbers, he is determined that the team can focus on the growth of the Kin ecosystem.
“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,” Livingston added.
