It was one of Canada's most promising social media apps. But Kik, once valued at $1 billion, is to be closed, in large part because of a Securities and Exchange Commission investigation into a cryptocurrency created by the app's owners.
Though not mentioned in the closure announcement released late Monday by CEO Ted Livingstone, the anonymous messaging app faced consistent criticism it had become a crime haven. Harassment and child exploitation, for instance, were constant problems.
In one shocking case, a 13-year-old was murdered by the man with whom she was communicating over Kik. A Forbes investigation later found that grooming and sharing of child abuse material was rife across the app. And earlier this year, it emerged the FBI had taken control of a Kik user's account to run groups sharing such illegal imagery for over a year as investigators sought to ensnare pedophiles.
But Livingtone didn't mention any of those problems. Instead, he said the company is refocusing on its cryptocurrency, Kin, launched back in 2017. In June the SEC charged Kin's creators over an initial coin offering (an ICO is a public sale of a cryptocurrency's tokens) that raised $100 million. (After another Forbes investigation, Kik promised to spend $10 million of that money on dealing with child abuse on the platform; with many other platforms, like Facebook and Twitter, also now investing hundreds of millions to deal with similar problems, the “anything goes” era now well and truly over.)
The SEC believes that Kin coins are, effectively, securities and should be regulated as such. That meant that the ICO should've been registered with the SEC, which it wasn't, according to the regulator. In a blog post, Livingstone cited problems with fighting the SEC on that issue as one of the core reasons for closing Kik.