The development team behind popular messaging app Kik, which is particularly popular with teenage users, has decided to suspend operations in order to dedicate business resources to Kin, an emerging cryptocurrency currently facing a lawsuit filed by the United States Securities and Exchange Commission. This decision will not only impact 300 million users of the messaging app but also 80 staff members who will be laid off.

Kik Interactive, the company responsible for both the messaging app and the Kin digital currency, announced its intentions to further develop the blockchain and potential circulation of the token. Estimates provided by Kik Interactive executives indicate that Kin is mined and earned by about two million users, most of them active users of the Kik messenger. The number of Kin spenders is much lower, but this is par for the course with regard to most digital currencies that fall under the alt-coin category. Nevertheless, the company has high hopes for Kin; to this effect, the remaining 19 employees are working on development of a digital currency wallet that will enable greater circulation, and a marketing strategy will involve targeting former users of the Kik mobile app.

Cryptocurrency market analysts believe that the Kik Interactive strategy is a last-ditch effort to save the Kin token, but it may not be enough to avoid the legal damage caused by the SEC lawsuit, which alleges that the company's initial coin offering violated investment laws. The SEC argument is based on treating the Kin token as an unregistered security, and this is hardly the only cryptocurrency facing such legal action. Ripple Labs, the development team behind the popular Ripple token, is also being sued by the SEC for similar reasons.

As can be expected, the Kin token has plunged in value following the aforementioned announcement about Kik shutting down. If anything, the messaging app, which has been praised for its strong privacy features, was considered to be a solid fundamental aspect of Kin because it provided a platform to stimulate circulation. Analysts are not convinced that a digital wallet for this Ethereum-based token will add much value.