Consequences of its trial with the SEC, KIK will stop its messaging application and fires staff!
by Alexander Romero 
Consequences of its trial with the SEC, KIK will stop its messaging application and fires staff!
For months, the KIK crypto project has been on trial with the Securities and Exchange Commission (SEC), which is suing KIK for the nature of its token, the SEC claiming that it’s a security.
KIK raised $98 million in September 2017.
Kik launched its Kin Virtual Token in 2018 with the goal of creating a decentralized digital services ecosystem.
The KIN token is worth $0.000010 today.
Dramatic consequences for a crypto project like KIK, the financial cost of a lawsuit with the SEC in the United States…
Fighting the SEC is fighting the US government with unlimited funds to pay lawyers and legal fees.
Lawyers are very expensive in the United States, it is millions of dollars in legal fees to pay for KIK in such a lawsuit.
KIK therefore announced that dozens of employees are fired and the termination of its messaging application KIK Messenger!
In an article on Medium, KIK CEO, Ted Livingston, announces the bad news and the situation of KIK even if the title says to go forward with courage, the future looks gloomy for this crypto project that has to face the SEC in court.
70 employees of the crypto Israeli subsidiary of Kik, Kin, were laid off on Monday.
The CEO of KIK mentions a reduced team of 19 employees to face the financial and legal concerns of the trial with the SEC, the famous Securities and Exchange Commission.
The SEC, for example, has just sentenced Carlos Ghosn, former CEO of Renault and Nissan, to a $1 million fine for having hidden $140 million of income he planned for his retirement.
The SEC is therefore greatly feared in the United States because it can lead a company to shut down or go bankrupt by its decisions or even just by the legal fees and lawyers that can cost millions of dollars in a lawsuit initiated by the SEC.
Kik was founded in 2009 by Canadian students, the application was launched in 2010.
Investors include Chinese firm Tencent Holdings Ltd., Union Square Ventures and Spark Capital.
The CEO of KIK therefore wants to face the SEC and declares:
“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.
So with the SEC working to characterize almost all cryptocurrencies as securities we made the decision to step forward and fight.”
“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. So today we are announcing three things:
- We will shut down the Kik app
- We will reduce our headcount to an elite 19 person team
- We will focus on one thing: converting Kin users into Kin buyers
These are hard decisions. 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.”
KIK therefore will do what it can to reduce its costs to the maximum in order to survive this legal procedure with the SEC.
The future will whether the crypto project KIK will survive this lawsuit with the SEC and the millions of dollars that it will cost them.
KIK had raised tens of millions of dollars in ICO but that will surely depend on how much money is left on the bank account to continue its fight against the SEC.
