KIK messaging app sell-off likely amidst regulatory issues |
Ted Livingston, the Chief Executive Officer of the Kik messaging app claims that the messaging service might not close down just yet, as there is a potential buyer for the platform.
Livingston announced the application’s shutdown on September 24, while explaining that the application alone costs the company over one million dollars ($1mil) per month and that these funds should be focused on fighting the legal battle with the United States Securities and Exchange Commission (SEC).
SEC and KiK messaging app
The SEC declared the company’s 2017 Initial Coin Offering (ICO) an unregistered securities offering.
The Chief Executive stated that the organization can not afford the texting application, due to which they had to shut the application down.
Currently, Livingston is striving to keep the application running. He tweeted about the firm signing a letter of intent with an organization that seems interested in buying the Kik texting application, while the organization will also continue to develop Kik while integrating Kin in it.
Although the deal has not been made yet, if it happens, it will be beneficial for the company.
Kik Team’s move comes forth as a surprise to the application’s user base that amounts to three hundred million people, who were recently compelled to migrate to other texting applications. Tia, a songwriter, has stated that the idea of KiK staying for longer has made her day.
Back in 2017, Kik messaging app had raised around a hundred million dollars ($100M) from over ten thousand investors (10,000) for an ICO using the Kin token.
A sizeable portion of the investment had come from investors based in the United States.
The SEC ended up suing Kik, claiming that they are not registered securities for investors based in the United States.
Steven Peikin, an SEC executive, has stated that the company had not provided information to the investors that they were entitled to, which prevented them from making informed or knowledgeable decisions regarding investment.
The company’s CEO states that he is ready to lead the company to bankruptcy if it’s imperative, just so that it can oppose SEC’s claims.
The SEC is currently a part of another ongoing case against Veritaseum’s owner, as the ICO was able to raise nearly fifteen million dollars ($15M).