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Kik Interactive, the Canada-based startup behind the famous mobile messaging app Kik, is planning to shut down the app.
The speculations were first reported by Israeli tech publication CTech Calcalistit and were later on confirmed in a blog post by Kik CEO Ted Livingston.
Livingston said the firm will shut down the Kik app, slash down its number of staff to 19, and shift its focus on developing the Kin token.
He said the move was needed to manage the firm’s resources after the U.S. Securities and Exchange Commission (SEC) sued the company for allegedly conducting an illegal $100 million securities offering of digital tokens in 2017.
“Instead of selling some of our Kin into the limited liquidity that exists today, we made the decision to focus our current resources on the few things that matter most,” the announcement stated.
Noting that the decisions were hard to make, Kik believes “… these changes will drop our burn rate by eighty five percent, putting us in position to get through the SEC trial with the resources we have.”
A total of 70 employees have reportedly received layoff notices and given the choice to transfer to a new firm that is operating in the same sector.
Kik’s Legal Battle with SEC
The SEC alleged that Kik had predicted to run out of money in 2017 and sought to pivot to a new business, which was funded through the token sale.
“At the time Kik offered and sold the tokens, the SEC alleges these services and systems did not exist and there was nothing to purchase using Kin,” the SEC noted.
Kik, in its response, accused the commission of twisting facts and taking contents out of context, submitting a paragraph-by-paragraph rebuttal of the arguments made by the SEC in its complaint. The startup further maintained that the kin token sale was not a securities sale.
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