Kik, one of the largest messaging applications to operate on a global scale, has decided to shut down in the face of a ferocious legal battle with the U.S. Securities and Exchange Commission (SEC) that has exhausted the company’s chances for survival. Recently, the company issued a layoff notification to 70 employees of its cryptocurrency subsidiary Kin in Israel.
Eight years ago, a group of students from Canada created an instant messaging application called Kik. Within days the application attracted millions of users, and in the subsequent years the company reached a market valuation of a billion USD.
The fame and success of the company prompted the founders to create and launch the digital token Kin for online trading; the targeted audience was companies that traded online. Despite the fact that the digital token was ranking high when it came to consumer adoption, it quickly started to shed its value. As of now, the virtual coin can be purchased for as low as $0.000008 USD.
The story of the shutdown was confirmed in a blog post that came directly from one of the founders and the current CEO of Kik and Kin, Ted Livingston. In the brief post, Livingston described the legal battle that took place between his company and the SEC, which was adamant on forcing Kik to label its pet cryptocurrency Kin as a security (which encompasses much stricter regulation). Livingston claims that any such move would have “killed the usability of the cryptocurrency and set a dangerous precedent” for the crypto industry.
In a three point conclusion that Livingston has drawn forth in the blog, he mentions:
- Shutting down Kim
- Laying off staff
- Focusing more on Kin
Livingston agreed that the prolonged court proceedings were costing the company hefty sums of money. With their resources quickly depleting, the company ultimately decided to layoff almost 80% of its employees. Livingston lamented that almost “100 employees and their families will be affected” by the termination process.
But despite the setback, Livingston acknowledged confidently his unstinting desire to polish and inure the cryptocurrency Kin to ensure that a decentralized economy could thrive to aid online customers to keep on trading seamlessly with a digital currency that has an actual value. The company has actually already employed Kin to raise funds for the legal costs against the SEC.
The CEO envisions converting Kin users into Kin buyers to improve the health and quality of the digital token. He hopes that by cashing on blockchain technology, “a billion” (yes, a billion) Kin users can benefit from real-time transactions that it would support. He further hopes to ensure the growth and sustainability of the cryptocurrency development process.
By laying off the staff members, Livingston hopes to gather sufficient resources to fund the company’s legal battle in court.
