Kik Messenger Saved From the Verge of Shutdown

It became clear just five days later why it was "Here to stay." A Santa Monica-based holding company, MediaLab, had signed an agreement with Kik Interactive to buy its Kik messaging platform.

Kik got a major break in fundraising in August 2015, when it received a $50 million investment from Chinese internet giant Tencent, the parent company of Chinese messaging service WeChat.

"Looking back at the crypto-world of 2017 it is impossible to say that Kik's move wasn't a shot worth taking, considering the financial weather for the company back then and the 'challenges' in late 2016 and early 2017, prior to the ICO. Only the future resolution with SEC will show the real definition of the current situation, helping the community understand if Kik had to stick to the traditional VCs in case it would turn out to be a disaster or if it was a well-thought out plan."

Kik vs. the SECHowever, due to the sheer volume of illegal ICOs taking place in 2017, the United States Securities and Exchange Commission began to intervene in the crypto space, which meant increased scrutiny for Kik.

Ever since the subpoena was opened, Kik had been fighting an uphill battle with the SEC. The SEC painted a picture of Kik Interactive Inc. being a cash-strapped company on its last legs.

"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.".

"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 MessengerIt 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.

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.