Kik Interactive has announced that it is closing its popular Kik Messenger app, and making nearly 100 people redundant, over a legal battle with the US Securities and Exchange Commission (SEC).
It is making the “hard decision” because it wants to throw all of its effort and “current resources” into a legal battle with the SEC, which it says is trying to classify its Kin cryptocurrency as a security, which would “set a dangerous precedent for the industry.”
Kik is free messaging app that has seen massive uptake since its launch 2010, with millions of users, particularly in North America. It allows users to send photos, have group chats and download different emoticons. Users can also create and send different memes and ‘photobomb’ their contacts.
It has also proved popular largely because it lets people register and use it without users having to provide a phone number or other credentials such as an email address.
But despite its success, the developers behind the app have decided to shut it down – a decision announced in a blog post by CEO Ted Livingston.
He described how the company will be reduced to just 19 ‘elite’ employees, which means that over 80 people will lose their jobs, as it focuses on converting more Kin users into buyers.
“When it comes to consumer adoption Kin is the most used cryptocurrency in the world. By far,” blogged Livingston. “But all is not well. After 18 months of working with the SEC the only choice they gave us was to either label Kin a security or fight them in court.”
“Becoming a security would kill the usability of any cryptocurrency and set a dangerous precedent for the industry,” he said. “So with the SEC working to characterize almost all cryptocurrencies as securities we made the decision to step forward and fight.”
He then said the messaging app would be shut down and staff would lose their jobs.
“These are hard decisions,” blogged Livingston. “Kik is one of the largest apps in the US. It has industry leading engagement and is growing again. Over 100 employees and their families will be impacted. People who have poured their hearts and souls into Kik and Kin for over a decade.”
“Together 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,” he added. “But no matter what happens to Kik, Kin is here to stay. Kin operates on an open, decentralized infrastructure run by a dozen independent companies.”
“Kin has over 2,000,000 monthly active earners, and 600,000 monthly active spenders,” he wrote. “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.”
It should be noted that date has been given for when the Kik app will close.
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