Regarding Kik’s ICO, Robin Meijer, an online marketing strategist at Netherlands-based crypto brokerage firm Bitcoin Meester, alleged that Kik knew it was in a legal grey area, telling Cointelegraph:
“I think KIK knew it wasn’t legal. Every country has its own legislation about ICO’s now but I think they could have foreseen that this wouldn’t end well, even if they launched it before there were any clear regulations. Since early 2018 governments and financial institutions have done their best at trying to regulate ICO's. KIK launched its ICO in 2017 when the regulations were almost non-existent. I feel like KIK is being used as an example for other ICO's.”
To raise both awareness and money, Livingston launched the Defend Crypto fund. The fund was taken over by the Blockchain Association, a collective of advocates involved with the blockchain industry. The Defend Crypto fund has raised $5 million to fight the charges brought by the SEC and an additional $1.6 million strictly allocated to non-Kik initiatives. David Pring-Mill a consultant for tech startups and the director of Hyperloop Advanced Research Partnership, told Cointelegrpah:
“Kik Interactive had its back against the wall. They were competing against Facebook, a company that verges on monopoly status when it comes to digital interactions. And Kik was trying to do something similar, albeit with a more defined target market. ICOs can facilitate the same purpose as IPOs but without the paperwork, safeguards, transparency, and oversight. Kik is objecting to the SEC's framing of the matter but I think that the agency was right to go after this.”
MediaLab buys Kik Messenger
It seemed that the desperate efforts to raise funds to fight off the case from the SEC were falling short, and the financial troubles put Kik at risk of losing its business and numerous employees their jobs.
On Sept. 24, the company’s CEO revealed that it would be shutting down the Kik app, reducing its staff to 19 people and focusing on the development of the Kin token. Even with an 80% reduction of its staff, Livingston was adamant about fighting tooth and nail with the SEC. He estimated that the closure of the platform would drop its burn rate by 85% and the resources would be directed to the SEC trial.
Related: KIK Closes Messenger and Lays Off Staff to Continue SEC Lawsuit Fight
However, those austerity measures never materialized, as on Oct. 14, Kik announced that it was “here to stay” and confirmed on Oct. 18 that MediaLab will be the new owner of Kik, potentially giving hope to the platform’s userbase and employees. Santa Monica-based MediaLab, which also owns the messaging app Whisper and music sharing platform DatPiff, took up the task of maintaining and improving the Kik Messenger app.
The blog post for the announcement said that MediaLab saw “something truly special” with Kik, adding that they both are “non-conformists”. MediaLab has plans to improve the Kik messenger, starting with taking suggestions from the community. Although prior to the audience suggestions, it had some ideas on how to improve the app. It wants to make “the app faster, more reliable, & less buggy,” as well as eradicate spam bots.
Now, Livingston will be running his team with a sole focus on cryptocurrencies. However, the MediaLab team will be in close partnership with Livingston’s team to further expand on Kin’s integration.
Even though some of the company’s financial troubles are solved, the legal vows still continue. The new plans to fight the SEC haven’t been revealed by either of the companies. The plans for a new monetization model have not been revealed yet. Kik has struggled with traditional advertising, and even declined a potential deal because the business model of the proposed acquirer was to collect and sell data. When asked about MediaLab’s motives behind buying Kik, Alina of Enigma security told Cointelegraph:
“The fact that they did not state anything or mentioned the lawsuit now, might tell us two things: either MediaLabs only buys out the app for the further development and leaves the financial problems to the ex-leadership, or they buy out everything completely, adopting each and every aspect of the company. For now it is hard to tell which route the new leadership will follow as it completely depends on the terms of the LOI between the parties, which for now have not been disclosed.”
Cointelegraph has reached out Livingston and his team, but they declined to comment on this matter.
