CEO Ted Livingston Kik announced today that the company is shutting down Kik Messenger to focus on its cryptocurrency Kin.
As it focuses on converting more Kin users into buyers, The company’s team will be reduced to 19 people depilation that will affect more than 100 employees.
“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,”
Adding that the changes will reduce the company’s burn rate by 85%, enabling it to get through the SEC trial, Livingston wrote in a blog post.
Two years ago, Kin launched raising nearly $100 million in its ICO, one of the first held by a mainstream tech company.
But in June, the SEC filed a lawsuit against Kik Interactive, claiming the ICO was illegal, as part of the Commission’s wider crackdown on companies it alleges are issuing securities illegally.
The SEC also claimed that the company’s management had predicted Kik Messenger would run out of money by 2017.
When it started planning the launch of Kin. Kik Interactive hit back in a court filing last month, saying that the SEC’s claims about its finances were
“solely designed for misdirection, thereby prejudicing Kik and portraying it in a negative light.”
“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 wrote in today’s blog post. “So with the SEC working to characterize almost all cryptocurrencies as securities we made the decision to step forward and fight.”
Livingston Also added that One of the core issues in the lawsuit is whether or not Kin is a security.
The SEC alleges that it is and that the token sale violated securities laws. Kik Interactive denies Kin is a security.
furthermore, Livingston Also said that because Kin isn’t available on most exchanges, it doesn’t rely on speculative demand.
Instead, Kin is used by “millions of people in dozens of independent apps,” with more than two million monthly active users and 600,000 monthly active spenders, he wrote. Kik Interactive’s objective now is to increase those numbers.
To get more people who buy Kin to use the currency, Livingston said the company will focus on three things.
Enabling the Kin blockchain to support a billion consumers making a dozen transactions a day, with confirmation times of less than a second.
Increasing adoption and growth for developers who use Kin in their apps, and building a mobile wallet that makes it easier to buy and use Kin.