According to the head of the company, the restructuring will reduce the average loss of Kik by 85%, which may help resolve the conflict with the regulator.
Canadian company Kik Interactive Inc. closes its main Kik Messenger app to focus on Kin cryptocurrency. This was announced by head of the company Ted Livingston on his Medium blog.
Livingston issued a statement shortly after the Israeli newspaper Calcalist revealed that Kik had sent notice of reductions to 70 employees of its cryptocurrency unit in Israel.
The head of Kik confirmed this information. He said that the staff of the Kin subsidiary will be reduced to 19 developers who will promote the cryptocurrency of the same name. It turns out that more than 100 employees fell under the reduction.
Livingston said the company is closing the messenger due to a prolonged conflict with the US Securities and Exchange Commission (SEC). According to him, the restructuring will reduce the average loss of the company by 85%, which in turn will help it resolve the conflict with the department.
Conflict with SEC – At the end of September 2017, Kik held an ICO of Kin tokens. The placement was carried out in two stages, in total the company raised $ 98 million. First, a closed token sale took place, which brought Kik $ 50 million. Then a public sale took place, during which it was possible to raise 168,732 ETH worth over $ 48 million.
The SEC has questions about the token sale. In particular, the agency considered that Kik violated the ICO registration procedure by not disclosing information about it properly and realizing the illegal sale of securities. In turn, Kik said it intends to challenge the decision of the regulator in court.
“Kin tokens are a monetization tool for the Kik platform. Users can earn these tokens in more than 30 mobile applications by completing various tasks. The Securities Act of 1934 does not allow currency to be added to them” – Livingston said then.
But the court department was not afraid and in June of this year was the first to bring charges against the company. The commission still insists that Kik led an unregistered sale of securities. The SEC also noted that the decision to conduct an ICO was made against the backdrop of the deplorable state of the company’s core business – according to the Commission, Kik expected to fix its financial situation in this way.
Due to the conflict with the SEC, Kin tokens have depreciated three times since the beginning of June. After today’s announcement, their price has fallen again – now tokens are trading at $ 0.000009 apiece.
What comes next – Livingston continues to advance the idea that Kik tokens are among the most used in the world. Blocktivity portal data confirms the words of the head of the company.
Livingston said that about 2 million people “earn” Kin tokens every month, and about 600 thousand users spend it. He expects that the loss of the Kik messenger will not affect these figures in the best way, but the growth and development of the ecosystem should compensate for the negative effect.
Now, the project team will focus on three things: increasing the speed of transactions in the Kin blockchain, expanding the adoption of cryptocurrency among mobile application developers, and creating their own cryptocurrency wallet.