One death-defying escape later, what’s next?
It’s been 37 months since the developers of Kik Messenger created a cryptocurrency, Kin, and offered up ten percent of the supply for sale to the public. I was a participant in that initial sale, and over time became more invested, both financially and emotionally, in the story of Kin and the community that grew around it. When I reflect on the last three years of that story, it’s hard to feel much other than pain. We knew early on that the U.S. Securities and Exchange Commission (SEC) was investigating Kik for potential misconduct during the sale, but the seriousness of the inquiry didn’t sink in for many until a Wells notice was made public in January 2019. Fast forward another year and a half, and Kik has lost its defense in court against the SEC, but has somehow managed to escape insolvency (thanks in no small part to the lawyers at Cooley), defying all precedent with a minor penalty and an implied go-ahead to resume operations unshackled.
The judge’s ruling in the case and the terms of the settlement make it clear that the Kin cryptocurrency is not in violation of any securities law and should be free to trade on exchanges.
- Kin Foundation
For both the founders of Kin and the investors who believed in their vision, this is great news. But it hasn’t come without devastating loss. And I’m not just talking about the spot price of the asset itself. To be able to afford a court battle that might have lasted years, Kik Interactive was forced to sell their app, their namesake, that had, only a few years prior, earned the startup a billion dollar valuation. Roughly a hundred employees were laid off at Kik or the Kin Foundation, between Tel Aviv, Waterloo, and New York City. A five million dollar fine had to be paid, and millions more in travel, legal fees, and executive hours. Opportunities for Kin to be traded on reputable exchanges or integrated into apps with millions of users were stopped dead in their tracks over and over again out of liability concerns.
Let’s be honest: The failure of Kik and the Kin Foundation to create market value for Kin can not entirely be blamed on the suffocating grip of the SEC. The organization grew too fast, failing to align teams across oceans on unified goals. Communications with developers and the investor community were inconsistent. Exciting partnerships were made, and then inexplicably lost or abandoned. The blockchain infrastructures chosen were unable to scale.
But let’s also be honest about the successes achieved despite it all, whether they reflected in the market value of Kin or not. Kin is the most used cryptocurrency in the world. It has been for some time now, peaking during the height of the coronavirus pandemic, as millions of users per month spent more time in apps like Rave, Madlipz, and Kik (now owned by MediaLab), sharing content with friends and family and rewarding each other for it. Kin’s daily transactional volume in dollars might pale in comparison to the speculative trading of Bitcoin or Ethereum, but that’s a far less meaningful measure towards mass adoption- ostensibly, the end goal of any currency. Kik Interactive should also be credited with making the tough calls that were necessary and downsizing when it had to be done. That decision likely preserved the needed financial runway not just to survive in court, but to turn now to regrowth and executing on the uphill battle that lies ahead.
Today we see some members of the community battered, staring at the scorched earth behind them, while a new dawn and new hopes lie ahead. They’re hopes that, in many ways, are the same hopes we shared years ago- three pillars to building lasting success that have gone undelivered, but may now, finally, have a real chance at coming to fruition.
- A fast, reliable infrastructure that offers room to grow.
- Fiat gateways for the app user (the non-investor) to purchase Kin.
- Reputable exchanges where market capitalists of all sizes can buy and sell Kin with liquidity, trusting that their funds are safe.
The story of Kin’s search for a blockchain (one which can scale to millions of users per day and deliver a user experience on par with what’s available for more common digital currencies) is one that has been told countless times, at length, and I don’t need to retell it here. However, the end of the story is still unwritten.
With the fast approaching migration to the Solana blockchain on December 8, the stakeholders of the Kin ecosystem once again believe they’ve found the endgame solution they’ve been searching for. With promises of sub-second transactions, Solana may finally allow the apps that integrate Kin to add more demanding features and expand access to more users. Kin will also be able to attract bigger applications who may have been hesitant to invest resources into a currency that presently can’t support them.
Then, there’s the new app from Kik Interactive, which they’re calling Code. While the details of the app’s feature set have not been announced, there have been enough hints given that we can take an educated guess. Code will likely allow users to easily buy Kin with fiat currency (dollars, et cetera), likely by credit or debit card, and should provide a user friendly wallet for managing their Kin and transferring it to wallets kept on the other Kin-enabled apps on their phone. However, it remains to be seen which regions of the world will have access to the fiat gateway, which should provide ease of access not unlike Venmo, PayPal, or other peer-to-peer financial apps.
While regulations have been placed by mobile platforms, banks, and governments on the purchase and transfer of cryptocurrency, the Kin Foundation board recently approved the adoption of major crypto payment processors Simplex and Wyre into the Kin ecosystem, which suggests that licensing and approvals are in place to permit credit card purchases of Kin, even in the U.S., though likely with limitations.
It was previously intimated that the fiat gateways would be available as modules that could be integrated into any existing Kin-enabled app, which would simplify the experience for users (not requiring them to download a secondary app to manage their Kin). It is unclear what features Code might uniquely provide for the ecosystem beyond app-to-app transfer and more advanced wallet management.
Lastly, there’s the question of when major cryptocurrency exchanges will finally list Kin for trading. It’s a question well known to the investor community, as it’s one that’s been asked ad nauseam since the days leading up to the public sale of Kin all the way back in 2017. We know from conversations had long ago, and the text of depositions given during the SEC inquiry, perhaps the most frustrating consequence of said inquiry- that several reputable exchanges have been interested in listing Kin for trading since day one, but felt either unable or unwilling after conference with their legal team. Fortunately, Kin now finds itself with those blockers eliminated, and we can expect to see reputable and well known exchanges ready to trade Kin soon, though likely following the move to the Solana blockchain.
With these three pillars soon to be built, at long last, and without the interference of the SEC, we can finally anticipate a rebuilding of the organizations guiding the Kin project forward. Already we are experiencing a renewed optimism within the Kin community, with hopes of finally earning the perception of legitimacy and possibility from the cryptocurrency industry at large. And somehow, despite giving up three full years of first mover’s advantage, and despite the encroachment of major tech companies into the cryptocurrency space (see Facebook’s Libra, or Square and PayPal accepting Bitcoin purchases and payments), there are still no serious competitors for the vision of Kin — an equitable restructuring of value in the digital world by incentivizing peer-to-peer reward.
I’ve spent plenty of time over the years prognosticating about when (or whether) Kin would win back the market recognition it deserves for its reach and vision, as compared to the litany of derivative, meaningless tokens and cryptocurrencies that can only buy attention and proclaim the kind of technical complexity that end users don’t care about. Neither my most optimistic nor pessimistic musings have come true yet. But despite all that’s happened, or really, given what hasn’t happened in the days since the SEC threw a wrench into the machine, I feel strangely justified in making another prediction: In 2021, Kin will find itself once again among the most valued cryptocurrencies in the world.
You can find me on reddit at u/side_click, or on Telegram at @sideclick.