The ongoing legal battle with the US government appears to have been quite costly for messaging startup Kik, who has chosen to shutdown its messaging app and narrow its team down to just 19 employees in order to reduce their burn rate. It now hopes that these cuts will provide enough resources to get through the litigation process.
In 2017 the popular messaging app Kik raised $100 million during the initial coin offering (ICO) for the Kin cryptocurrency.
The Securities and Exchange Commission (SEC) of the United States claimed that this was an unregistered and therefore illegal ICO. Kik chose to fight the SEC in court, in order to prevent the Kin cryptocurrency from being labeled a security, which would ruin its usability.
Now what remains of the Kik team will focus on developing the infrastructure surrounding the Kin cryptocurrency.
Kin has 2-3 million active users, while the Kik messaging app has hundreds of millions of active users. The loss of the Kik app raises some doubt as to how viable Kin will be in the future. Indeed, the price of Kin has dropped by 70% since the legal battle with the SEC started in June.
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