Bad news, Kik users: The popular messaging app is in its final days.
Kik Interactive CEO Ted Livingston announced the shut down via Medium on Tuesday, citing a costly legal battle with the U.S. Securities and Exchange Commission. The case stemmed from a June SEC lawsuit in which Kik was accused of illegally raising $100 million in an initial coin offering (ICO).
From May to September 2017, Kik offered and sold one trillion digital tokens called “Kin.” More than 10,000 investors worldwide purchased Kin for approximately $100 million in U.S. dollars and digital assets – over half of this sum coming from investors located in the United States. However, Kik’s offer and sale of Kin was not registered with the SEC, and investors did not receive the disclosures required by the federal securities laws.
Livingston essentially admitted defeat, stating his company was prepared to duke it out in court, but had "underestimated" the SEC's legal tactics. He accused the agency of taking quotes out of context, portraying the company heads as bad actors, and pressuring exchanges not to list Kin.
The CEO said Kik will use its remaining resources to grow its cryptocurrency Kin, which, interestingly enough, was at the center of the SEC lawsuit. Livingston said Kik will do this by shutting down the messaging app, reducing the company to "an elite 19 person team," and focusing on "converting Kin users into Kin buyers."
"These are hard decisions. Kik is one of the largest apps in the US. It has industry leading engagement and is growing again," he wrote. "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 has not indicated when Kik will official shut down. The app launched back in 2010 and currently has millions of active users around the world.
