Kik, the Canadian maker of a messaging app popular with teens, is shutting down its app and laying off most of its employees to focus solely on Kin, the cryptocurrency it created.
The U.S. regulator has sued the company, alleging that it conducted an unregulated sale of securities when it raised around US$100 million in 2017 through an initial coin offering for its nascent cryptocurrency, Kin.
Steven Peikin, Co-director of the SEC’s Division of Enforcement, said at the time that by conducting its Kin tokens sale, Kik “deprived investors of information to which they were legally entitled and prevented investors from making informed investment decisions.”
Currently, the KIN token is thinly traded on exchanges, but it is used in an ecosystem of earnings for ad viewing, and spending on virtual goods. Livingston wants to add direct purchases of KIN to boost the company’s position.
“We are close. 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,” he explained.
Kik’s lawyers stated that the SEC took quotes out of context, twisted facts in order to support their allegations, and misrepresented the facts because they have no strong evidence to support their claims.
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.