Surviving in the cryptocurrency and blockchain industry is never a given. Numerous companies have come and gone for a wide variety of reasons. In the case of Kik, the popular messaging platform, it seems things have come to a head. Despite working together with the SEC regarding its Kin cryptocurrency, the parties couldn’t come to a mutual agreement. As such, Kik will be shut down and the future of Kin remains somewhat uncertain at this time.
The SEC Doesn’t Budge
Not too many people will be surprised to learn that the SEC will not budge regarding companies issuing their own blockchain tokens. Even in the case of Kik, the company itself seems perfectly legitimate. However, their decision to create the Kin cryptocurrency and sell it through an initial coin offering has raised a lot of questions. The SEC has kept close tabs on this project for nearly two years now, yet it seems no agreement has been achieved between both parties. Nor will there be any agreement either, as the Kik team has made some very interesting decisions.
After 18 months of collaborating with the SEC, the team learned that there were only two choices in front of them. Either they agreed Kin was a security – with all repercussions of illicitly issuing a security without governmental approval – or a court case would be launched. In the latter case, chances of Kik coming out on top were slim to none, as they simply cannot argue with the facts of how things have unfolded when Kin was issued to the masses.
Kik Will Shut Down
Despite noting strong growth in Kik adoption – as well as Kin usage – the team has decided it would be best to shut down the Kik application and service altogether. This can be considered to be a major blow for the company. Kik is one of the biggest apps in the US market, and it will all come crashing down in a matter of weeks. As a result of shutting down the platform, several dozens of employees will also be let go in the process, as the team will be reduced from over 100 employees to a core team of just 19.
Some people may wonder if the Kin tokens will be dumped on the open market. That will not be the case, as there simply isn’t enough liquidity to do so, even if the team had such plans, which isn’t the case. Instead, they will reduce the burn rate of Kin by 85%, which should give them the financial means necessary to get through the SEC trial accordingly. This setback will not be the end of kin in any way, as it is a decentralized project which continues to be sued by millions of users around the world.
Kin Ecosystem Growth
The loss of Kik will trigger a blow, but not one that is insurmountable by any means. Instead, it seems the Kin ecosystem itself continues to grow, with dozens of independent applications making use of the technology and the Kin token itself. How this news will affect potential future exchange listings, is difficult to determine. So far, Kin hasn’t made its way to too many trading platforms, and it seems unlikely that the situation will change in a significant manner any time soon.