The popular mobile instant messaging app, Kik Messenger, is officially shutting down after nearly 9 years of being in service. The news is shocking to the 300 million+ people throughout the world who use the app. They love the fact that the app is free because they can send text messages without exhausting their SMS text limit. Friends and family members can easily communicate with each other no matter if they use an iOS or Android mobile device. Sadly, they’ll have to find a new instant messaging app.
There are several rumors floating around the internet as to why Kik Messenger is shutting down. Some people think the shutdown is connected to a hoax involving the chief executive officer of Kik Interactive, Ted Livingston. Not long ago, there were reports that Livingston spread bad information on the cryptocurrency news website, CoinDesk. As it turned out, someone pretended to be Livingston in order to spread these lies. Now the real Livingston has been exonerated in the scandal.
The official Kik website did not even feature the announcement about the shutdown. Their own Facebook fan page and Twitter page did not have any information about it either. That is why so many Kik users were flabbergasted when they heard about the shutdown announcement through other means. It still doesn’t make sense to the 15+ million active daily users of the Kik Messenger app software.
Livingston decided to make the shutdown announcement in a blog post on the online publishing platform, Medium. He did not describe the reasoning for the shutdown as having anything to do with the CoinDesk hoax. His reasoning had more to do with Kik Interactive’s legal entanglement with the United States Securities and Exchange Commission over the company’s new cryptocurrency, Kin.
Kik Interactive spent considerable amounts of time, money and resources on attorneys to help prevent the Kin cryptocurrency from becoming classified as a security. It got to the point where the company had to cut corners in order to keep themselves afloat. As a result, a tough decision was made to shut down the Kik Messenger app altogether and focus their energy entirely on their Kin cryptocurrency.
Transition from Messenger to Cryptocurrency
Kik Interactive launched Kin through an initial coin offering in September of 2017. It only took roughly 2 weeks for investors to spend nearly $100 million on the cryptocurrency. The company’s vision was to create a decentralized environment where users can buy and sell digital products or services with Kin.
For the last 2 years, Kik Messenger incorporated Kin into its platform. If a messenger user wanted to earn more Kin coins, they could do so by actively contributing to the Kik community. Kik Interactive had the brilliant idea of introducing Kin to the millions of existing people who used their messenger app. This made it a lot easier for the company to launch its cryptocurrency and gain support for it quickly.
According to Livingston, more consumers have adopted Kin than any other cryptocurrency used throughout the world. Unfortunately, the SEC is on a mission to label all cryptocurrencies as securities. Livingston resisted their request because he wants to keep Kin as a decentralized form of cryptocurrency. He feels that if Kin becomes a security, then its usability will take a turn for the worst. It may encourage other cryptocurrency creators to settle for the SEC’s demands as well. This is something he does not want to happen for the cryptocurrency community.
Livingston has already made several accusations against the SEC regarding the actions they’ve taken against Kik Interactive. One accusation suggests the SEC is trying to deceive the public’s perception of his company by misquoting his employees about Kin. Another accusation suggests the SEC is telling all the exchanges to keep Kin unlisted. This is a long and drawn-out legal battle which is financially damaging to Kik Interactive.
A very important decision had to be made. Livingston was either going to sell limited amounts of Kin coins to the public or redirect all Kik’s existing resources toward Kin. Ultimately, it seemed more beneficial to the company to go with the second choice. Livingston figured that since millions of users are already at his fingertips on Kik Messenger, he could try converting them into purchasers and investors of his Kin cryptocurrency.
But first, Livingston proceeded with the Kik shut down. This had a detrimental effect on the Kik employees too because Kik shutting down meant they were likely going to get let go from their jobs. As it turned out, Kik downsized their staff count from more than 100 employees to approximately 19 employees. All these remaining employees are a team which focuses 100% of their time and energy on Kin.
Obviously, this was a hard decision that affected a great number of stakeholders of the company. Not only did almost 100 people lose their jobs, but their families also suffered from the aftermath too. Furthermore, people who spent nearly 10 years working on Kik Messenger and Kin cryptocurrency were suddenly gone in an instant. So, the emotional impact has certainly been overwhelming, to say the least.
The good news is that Kik Interactive was able to free up about 85% of its resources from this decision. Now they’re in a position to successfully finish their legal battle with the SEC without exhausting all their resources. And even if Kik Interactive does not survive the battle, Kin will continue to live on. That is what’s great about it being a decentralized infrastructure. It allows several independent companies to run the cryptocurrency, regardless of whether Kik is still around or not.
Millions of people utilize dozens of cryptocurrency apps for the purpose of trading Kin. Therefore, it doesn’t look like it’s going away anytime soon. It is just unfortunate that it had to be at the expense of Kik Messenger. It would be unrealistic to think that every Kik user will want to invest in Kin after the messenger goes away. In fact, the company is likely going to lose a significant number of its devoted users because Kik is closing down. Their goal is to retain at least 500,000 to 600,000 active users on Kin. Then as the Kin community continues to grow, it’ll be harder for the SEC to have power over it.