Kik Interactive, the company behind the messaging platform, is currently embroiled in a legal fight with the U.S. Securities and Exchange Commission (SEC), which alleged Kik violated securities law when it raised $100 million in a token sale in late 2017. Livingston vowed to fight the SEC, but announced in late September that Kik would be shutting down the messaging app portion of its business. Livingston directly attributed this shutdown to the SEC fight in a blog post at the time.
The Kik messaging platform has been bought by MediaLab, a holding company which operates Whisper and a number of other apps, the company announced Friday.
Kik Interactive, the company behind the messaging platform, previously announced that it would be shutting the app down in October, though CEO Ted Livingston announced last week that a company had signed a letter of intent to purchase the app. Details of the sale were not disclosed.
“We believe that Kik’s best days remain ahead of it”, the blog post read. While MediaLab plans to commit to Kik long-term, the company is looking to raise revenue through the messaging app, and will integrate ads on the platform as a short-term effort to do so. (Livingston has previously pushed back against the idea of enabling ads on the platform.)
Livingston did pledge that the company would continue to build out the Kin ecosystem, referring to the cryptocurrency Kik built as part of the token sale process.
In Friday’s blog post, MediaLab said the messaging app would continue to enable kin transactions, writing:
“We are fans of Kin and believe in its long term potential. We are excited to further partner with Ted and his team on expanding the Kin integration and have plans to further support the project. We’ll have more to share on that front soon.”
Going forward, MediaLab plans to improve the app, reduce the number of bugs, and solicit feedback from the app’s users to determine what features they want or issues they have.
“Ted Livingston and the rest of the team at Kik have spent the last 9 years building something truly special”, the announcement read. “At the risk of sounding cheesy we are still passionate believers in what the internet promised to bring in its early days – a connected and shared experience amongst people regardless of geography or time zone. Kik is one of those amazing places that brings us back to those early aspirations.”
Kik Messaging App to Shut Down Following SEC Lawsuit Against ICO
Following reports its crypto-focused subsidiary Kin had laid off 70 employees, Kik Interactive CEO Ted Livingston announced Monday that Kik will also be shutting down its core messaging service.
Speaking with CoinDesk, and in a company blog post, Livingston said the ongoing dispute with the U.S. Securities and Exchange Commission (SEC) has forced Kik to close its doors.
“This is a direct impact from the SEC legal action”, Livingston told CoinDesk.
In addition to shutting down the app, Livingston said the company would shrink its crypto operations to just 19 core developers in an effort to “ensure that KIN can scale to become the true currency of the internet going forward.”
Kin is responsible for the development of digital products for the use of the KIN token.
“Kin has over 2,000,000 monthly active earners, and 600,000 monthly active spenders”, Livingston said. “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 is currently in a dispute with the SEC over the 2017 initial coin offering of its KIN token. The ICO raised $100 million, which the SEC claims was an unregistered securities offering. Since the SEC allegations in June, Kin’s token has dropped from $0.000036 to $0.0000105 as of today, according to data provider Messari.
While the Kik app and Kin Foundation are shutting down, Livingston said the core developer team is pivoting toward developing the KIN token.
“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.”
Israeli news site Calcalist first reported the Kin layoffs. Calcalist also claimed Kin was being shut down as parts of the technology would be moved to different platforms, such as the Kik app.
Aspects of the report were confirmed on the Kin Foundation’s official Reddit page. “I can confirm a restructure is happening”, a spokesman from the foundation wrote at the time.