Instant messaging mobile app, Kik Messenger has announced it is shutting down despite having millions of active users around the world.
The company revealed it came to the decision so it could focus on the Kin cryptocurrency it has also created.
In a blog, Kik Interactive said the decision had been forced on it by a legal wrangle with the US Securities and Exchange Commission (SEC) over Kin. The decision also means that 80 staff who keep Kik running will be let go while no date has been given for when the Kik app will close.
Launched in 2010, Kik Messenger became a hit owing greatly to the fact that it lets people register and use it without providing a phone number or other credentials.
The app has also been embroiled in controversies as it had featured in 1,100 UK child sexual abuse cases police had investigated in the past five years.
In response, Kik said it was “constantly assessing and improving its trust and safety measures”.
Kik Interactive founder Ted Livingstone disclosed that the company had taken the “hard decision” to shut down Kik because it wanted to devote all its attention to the Kin cryptocurrency.
By shutting down Kik and shrinking to 19 employees, the company could cut its overheads by 85%, he said, giving it a much better chance of winning the legal fight with the SEC.
He acknowledged the difficulty the decision would cause as it would mean laying off people who had families and who had “poured their hearts and souls into Kik and Kin for over a decade”.
The legal row blew up because the SEC wanted the Kin crypto-cash launch categorized in the same way as the initial stock offering for companies that floated on the stock exchange.
It said when Kik Interactive had launched Kin, it had effectively conducted a $100m (£80m) “unregistered” stock offering.
Mr. Livingstone said it had to resist the classification of Kin as “security” because this categorization would “kill” its usability and that of other similar crypto-cash systems.
“We made the decision to step forward and fight,” he said.
As well as fighting in court, Kik Interactive would also work to convert the millions of existing Kin users into more active customers and buyers, Mr. Livingstone said.
Kin currently had two million “monthly active earners” and 600,000 “monthly active spenders”.
And growing the community of Kin users significantly would make it far harder for the SEC to prevail.
“Together we will win,” Mr. Livingstone added.
