Update [September 24, 14:00 UTC] - This article has been amended to remove messages that were supposedly sent to CoinDesk by Kik CEO Ted Livingston. It turns out that CoinDesk fell foul to a hoax by someone pretending to be Livingston, and that he did not send the messages. Ergo, it is not true that he was considering quitting.
Ted Livingston, the CEO of messenger app Kik and associated blockchain company, Kin, has made a tough decision in the hope of keeping the Kin cryptocurrency afloat. Due to the costs involved in Kik’s high-profile lawsuit with the SEC, it is shutting down its messaging app Kik—with its 300 million users—to help keep it afloat.
Despite having 600,000 monthly users since it launched two years ago, the SEC has hounded Kin for selling tokens during its ICO, which raised $98 million. The SEC claims it was an unregistered securities offering. And it’s been a costly business.
SEC lawsuit is sinking Kik’s business
All publicity is good publicity. Except when the SEC is involved. Kik, the Canada based messaging startup behind Kin, is embroiled in a lawsuit with the Commission over its $100 million token sale in 2017. The SEC says it was an unregistered security offering, and demands the company give all the money back, with interest. Kik says it has a case, and is taking on the SEC in a federal court in New York–most projects have quietly caved in and settled out of court. If it can prove its case and win,...
The fight has already cost Kik $5 million, as well as losing it potential new business. While it set up a $5 million fund to help it keep fighting, it was not enough. Instead, it is closing down the Kik app, cutting its headcount from 100 to just 19 staff and focusing fully on making Kin succeed.
In a Medium post, Livingston said, “Together these changes will drop our burn rate by eighty five percent, putting us in a position to get through the SEC trial with the resources we have.”
But will this period of austerity help Kin to succeed or is it the final straw to a struggling blockchain project?
