Following reports its crypto-focused subsidiary Kin had laid off 70 employees, Kik Interactive CEO Ted Livingston announced Monday that Kik will also be shutting down its core messaging service.
Speaking with CoinDesk, and in a company blog post, Livingston said the ongoing dispute with the U.S. Securities and Exchange Commission (SEC) has forced Kik to close its doors.
“This is a direct impact from the SEC legal action,” Livingston told CoinDesk.
In addition to shutting down the app, Livingston said the company would shrink its crypto operations to just 19 core developers in an effort to “ensure that KIN can scale to become the true currency of the internet going forward.”
Kin is responsible for the development of digital products for the use of the KIN token.
“Kin has over 2,000,000 monthly active earners, and 600,000 monthly active spenders,” Livingston said. “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.”
Kik is currently in a dispute with the SEC over the 2017 initial coin offering of its KIN token. The ICO raised $100 million, which the SEC claims was an unregistered securities offering. Since the SEC allegations in June, Kin’s token has dropped from $0.000036 to $0.0000105 as of today, according to data provider Messari.
While the Kik app and Kin Foundation are shutting down, Livingston said the core developer team is pivoting toward developing the KIN token.
“Kin is a currency used by millions of people in dozens of independent apps. So, while the SEC might be able to push us around, taking on the broader Kin Ecosystem will be a much bigger fight. And the Ecosystem is close to adding a lot more firepower.”
Israeli news site Calcalist first reported the Kin layoffs. Calcalist also claimed Kin was being shut down as parts of the technology would be moved to different platforms, such as the Kik app.
Aspects of the report were confirmed on the Kin Foundation’s official Reddit page. “I can confirm a restructure is happening,” a spokesman from the foundation wrote at the time.
Kik image via Shutterstock