Kik Messaging to Shut Down, Focus on Dispute with SEC
- After 18 months of disputes, the SEC left the foundation with only one choice – to label the token a security, which would kill its usability.
- While the Kik messaging app is shutting down, the core of its developer team will continue to work towards developing the KIN token.
Kik CEO Ted Livingston said the company is going to fight the SEC’s rigid stance on crypto crowdfunding sales. Flickr/TechCrunch
After all the past rumors about the bad situation the official cryptocurrency of the Kik messenger service – Kin – is in, and the fact that they had to lay off 70 employees, it seems that things are not getting any better. On Monday, Ted Livingston, Kik Interactive CEO announced that they will have to shut down their core messaging service.
Livingston explained in a blog post that the reason for this hard decision is the still continuing conflict with the U.S. Securities and Exchange Commission (SEC).
As the blog post reads:
“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.”
It seems the system had the last laugh
The sad part is that, besides shutting down the app, Livingston shared that they would also decrease the size and effort towards their crypto operations. In the future only 19 core developers will work in this area and their objective will be to support the adoption of Kik’s KIN cryptocurrency.
As stated in the blog post:
“Kin has over 2,000,000 monthly active earners, and 600,000 monthly active spenders. 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.”
Kik’s problems with the SEC started way back in 2017 with the ICO of their KIN token. SEC claims that the raised $100 million are actually unregistered securities offerings. Since these allegations started, KIN’s price has dropped from $0.000036 to $0.0000101.
While the Kik app is closing operations, Livingston shared that its core developer team would be working on developing the KIN token, or as written in the blog post:
“Kin is a currency used by millions of people in dozens of independent apps. 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.”
The Israeli Calcalist was the first media to report these Kin layoffs, which were followed by confirmation on the official Reddit page of the Kin Foundation stating: “I can confirm a restructure is happening,” a spokesman from the foundation wrote at the time.
- During an interview with FT, CEO Brian Armstrong said that before the lawsuit a SEC staff member had said that all crypto except BTC was security, and should be delisted.
- When asked how he came to that conclusion, the SEC staff member reportedly said “we’re not going to explain it to you, you need to delist every asset other that Bitcoin”.
Coinbase CEO Brian Armstrong appears on stage at the 2014 TechCrunch Disrupt Europe/London, at The Old Billingsgate on October 21, 2014 in London, England. Anthony Harvey/Getty Images for TechCrunch
- The U.S. SEC, CFTC, and FTC have all filed separate lawsuits against bankrupt crypto lender Celsius and its former CEO Alex Mashinsky, charging them with multiple counts of fraud.
- Mashinsky was also arrested in New York on Thursday, and later charged by the Department of Justice with securities fraud, commodities fraud, and wire fraud.
- The U.S. regulator has alleged that the platforms offered unregistered securities to the general pubic in the form of the BNB token and BUSD stablecoin.
- Binance was also accused of failing to register as an exchange, and that it had comingled funds between its global and U.S. platforms.