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Kik Interactive CEO Ted Livingston announced today that the company is shutting down Kik Messenger to focus on its cryptocurrency Kin, the target of a lawsuit filed by the Securities and Exchange Commission.
The Canadian social media and messaging app company Kik said to be thinking about possible shutting down of its popular Kik messaging app.
Two people familiar with the matter claim that the company is moving all the app’s users to alternative platforms. They also added 70 employees of Kik’s Israeli cryptocurrency subsidiary Kin being noticed about possible layoffs even though some will allegedly be offered the option of transferring to a new company that is based on the same technology, the sources said.
A following blog post by Kik CEO Ted Livingston started with the words “all is not well” and in that way confirmed the reports. The blog states that the company plans to shut down the Kik app, reduce its staff to 19 people and focus on its Kin (KIN) token’s development.
Livingston further explained:
“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. So with the SEC working to characterize almost all cryptocurrencies as securities we made the decision to step forward and fight.”
Livingston added that in the company they were ready to take on the SEC in court, but that they underestimated the tactics SEC could have used. He presumes SEC could take their quotes out of context in order to manipulate the public to view them as the bad guys. He presumes that SEC would put pressure on other exchanges not to list Kin and try to draw out a long and expensive process to drain Kik’s resources.
The truth is, Kik has been fighting its initial coin offering’s goals in court ever since the SEC sued the Canadian startup for a supposedly unregistered $100 million token offering.
Livingston announced three things with shutting down the app being the first one, reducing their headcount to an elite 19 person team being a second and as a third one he mentioned converting Kin users into Kin buyers.
Steven Peikin, Co-director of the SEC’s Division of Enforcement, said at the time that by managing its Kin tokens sale, Kik “deprived investors of information to which they were legally entitled and prevented investors from making informed investment decisions.”
Kik’s lawyers stated agreed with Livingston about the SEC taking quotes out of context, turning around facts in order to support their accusations, and misrepresented the facts because they have no strong evidence to support their claims.
In the meanwhile, Kik launched a $5 million crypto initiative to fund its lawsuit against the SEC, which was taken over by the Blockchain Association, a forum of advocates who are involved with the blockchain industry.
Kik believes that the Blockchain Association “will be in the best position to objectively allocate the resources to the highest impact initiatives.”
Livingston is Out
Also, one more interesting fact is that Livingston might have sent a misdirected message under the influence of alcohol saying:
“Will, I know I’ve been drinking, but this ain’t the drink talking, I’m [fed] up with this shit. We’ll talk more in the morning about replacement, but i quit. I have my ticket. I’m not going to jail for this.”
Livingston deleted the message afterwards when it was received by one reporter also named Will, and when asked to clarify his comments, Livingston replied “no comment.”