TORONTO — The head of Kik Interactive Inc. says he’s prepared to drive the company into bankruptcy in a fight with the U.S. securities regulator over the future of its Kin cryptocurrency.
“We have to keep going. Until that’s it, we don’t have a dollar left, a person left. We will keep going no matter how hard it is,” said founder and CEO Ted Livingston at the Elevate conference Wednesday.
His comments come two days after he announced that Kik Interactive would cut most of its staff, shut down its popular Kik Messenger app, and focus all efforts on the Kin cryptocurrency that it launched in 2017.
The move comes after the Securities and Exchange Commission accused Kik Interactive in June of conducting an “illegal” US$100-million securities offering when it initially sold the Kin cryptocurrency. The company maintains that the currency rollout was not a security offering.
Livingston said the company was left with little choice but to fight the SEC because if the cryptocurrency is deemed a security then it becomes bogged down in regulations and no longer workable, and the company would have no way to make money.
“Those are the two options it came down to, so when we looked at that, we said, ‘We feel very confident that we are correct. We need to fight.'”
He said the regulator has been dragging its feet along the way, both in giving guidance on cryptocurrencies and in moving forward with the trial, but that the company hopes to go to trial as soon as next May.
The SEC lawsuit has slowed the adoption of the Kin cryptocurrency and limited trading of it, though some 60 apps still use it, said Livingston.
The lack of revenue from the cryptocurrency or from the messaging app led the company to cut down its team from 151 to 19, he said, including staff at its offices in Waterloo, Ont. and Tel Aviv, with the remaining staff focused on Kin.
Tanner Philip, technical advisor to the CEO at Kik and Kin, said by email Wednesday that the company had entered into a letter of intent that will see the Kik team stay intact and transition to a new company setting up in Waterloo. He declined to provide details of the transaction.
The remaining team of 19 will focus on getting people to buy the Kin cryptocurrency, which currently can only be earned through apps by doing things like taking surveys or participating in polls.
Livingston said that he will push on with the cryptocurrency because he sees it as the only way to address growing problems like economies dominated by a few monopolies and an increasing concentration of wealth.
“Cryptocurrencies are the only way, the only tool we have now that we can counteract that, where we can build a new economy with a new form of money where we can rewrite the rules for how wealth and value is created in a global society.”
This report by The Canadian Press was first published Sept. 25, 2019.
Ian Bickis, The Canadian Press