Rest in Peace Kik, Long live Kin – FutureSin
Some startup stories go horribly wrong. Some crypto adoption can also be dangerous for your business. This is the saddest story in crypto for me personally. I write this all with a heavy heart. Listen to what I’m going to save or go straight to the source.
Kik was an incredible chat app popular among teenagers and the company spun off the cryptocurrency ecosystem of Kin. Shocking to me however is how the SEC went after Kin, and even worse, Kik’s CEO decided to shut the chat app down to focus on Kin.
He wrote it about it on a Medium post on September 23rd, 2019. Kik Messenger, commonly called Kik, was a freeware instant messaging mobile app from the Canadian company Kik Interactive, and the product lasted almost 9 years.
Kik’s Founder explains here:
This was a Canadian startup that really created an incredible chat-app. Everything changed when The Securities and Exchange Commission (SEC_ decided to sue Kik Interactive for the $100 million token sale the company announced two years ago. It was not a big token sale, but for whatever reason the SEC decided to make an example of Kin.
Crypto is not always glamorous, it has heartbreak too.
So with the SEC working to characterize almost all cryptocurrencies as securities, Kin decided to step up to the fight and that must have been expensive for the Canadian startup.
Such a legal battle has had consequences on the direction of the startup, The company’s team will be reduced to 19 people, a reduction that will affect more than 100 employees, as it focuses on converting more Kin users into buyers.
It must have been a brutal decision for the Canadian startup, I feel bad for the entire blockchain startup space to have to struggle though such things. “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,” Livingston wrote in a blog post, adding that the changes will reduce the company’s burn rate by 85%, enabling it to get through the SEC trial.
This story has to be told, but it hasn’t, for the most part Kik’s death hasn’t even been noticed by the major tech publications. We’re talking blockchain and we’re talking a Canadian crypto idea.
Kin launched two years ago, raising nearly $100 million in its ICO, one of the first held by a mainstream tech company. But in June, 2019 the SEC filed a lawsuit against Kik Interactive, claiming the ICO was illegal, as part of the Commission’s wider crackdown on companies it alleges are issuing securities illegally.
While we are ready to take on the SEC in court, we underestimated the tactics they would employ. How they would take our quotes out of context to manipulate the public to view us as bad actors. How they would pressure exchanges not to list Kin. And how they would draw out a long and expensive process to drain our resources. — Ted Levingston, CEO of Kik and Kin
It hurts me to read that. Kik was an incredible product and surprisingly popular among teenagers. Sure users of the chat app started to drop off around 2016. Kin also has a lot of good ideas about how we could earn crypto in apps.
The SEC has been slow to act towards some of the bigger Initial Coin Offerings, but for some reason went after Kik/Kin. The SEC also claimed that the company’s management had predicted Kik Messenger would run out of money by 2017 when it started planning the launch of Kin. Kik Interactive hit back in a court filing last month, saying that the SEC’s claims about its finances were “solely designed for misdirection, thereby prejudicing Kik and portraying it in a negative light.”
As you can see, the SEC appears to have outmaneuvered legally speaking, the small Canadian startup, that did its best to combine crypto with its flagship chat app. Kik as a small startup clearly had difficulty doing all that it had promised with Kin in the timeline that the SEC feels was justified, so there’s a little controversy here to be sure.
Still, you had wanted the little guy to build something special here with blockchain tech and for chat apps to leverage their consumer base in a way that fostered an evolution into their own cryptocurrency. You had hoped things would work out in the blockchain world back when crypto and ICOs were hyped, when we invested in them and when things like ICOs were exciting and not banned also from Medium (see Medium’s new rules).
As a startup, it isn’t over for Kin, but it is over for Kik, and the incredible team that built and scaled the product, not an easy feat in Canada. For instance, by May, 2016, Kik had had 300 million registered users and was being used by around 35% of U.S. teenagers. That’s not the kind of scale most Canadian startups will ever achieve in such a competitive market like chat.
What is there even left to say? Blockchain startups had so much enthusiasm that they were doing something good. So many that I used to know, no longer even exist today.
Published at Thu, 03 Oct 2019 02:22:35 +0000
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