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By Gertrude Chavez-Dreyfuss NEW YORK, Sept 26 (Reuters) - Kik Interactive, which created the global chat platform Kik, valued at $1 billion, said on Tuesday it raised nearly $100 million in the sale of its own token, below its expectations.
A volatile crypto-currency market has partially reduced demand for token offerings, the Ontario, Canada-based company said. In late August, Kik said it expected to raise $125 million. Proceeds will be used to create a decentralized network of different types of online services, initially within the Kik platform.
Kik's crypto-currency, Kin, will enable customers to have access to those services. Kik is a free chat and messaging application built for teenagers, with about 300 million registered users. It's the first social media application to create its own digital currency.
The token sale was part of on ongoing trend in which start-ups in the blockchain space create tokens or digital currencies and sell them to the public in order to finance projects. Blockchain is a digital ledger of transactions underpinning bitcoin, which is
traction with its ability to record and track the movement of assets.
Kik's token will be launched off the Ethereum blockchain, another online public ledger much like that of bitcoin. In an emailed statement to Reuters, Kik said it adopted the most stringent "know your customer (KYC)" process, requiring participants to submit legal names, addresses, and identification. That may have contributed to a less-than-stellar showing for Kik's token, the company said The company also restricted people living in China, Canada, New York, and Washington, which limited the overall number of participants.
Kik also attributed the lower-than-expected fund-raising figure to the volatility of the crypto-currency market over the last two weeks, during which bitcoin has seen sharp price gyrations. After hitting nearly $5,000 in early September, bitcoin fell below $3,000 in the middle of this
It was last down 0.5 percent at $3,858 on the BitStamp platform . Regulators' recent warnings about token offerings, which are primarily paid for in digital currencies, have taken the wind out of bitcoin. China earlier this month banned all token sales.
Regulators from South Korea, Malaysia and Britain followed China's lead and cautioned investors about the risks of buying tokens. Kik still considers its token offering a success, noting that more than 10,000 people from 117 countries participated. The company said Kin will be integrated into Kik as the primary transaction currency.
into Kik's chat platform to drive mainstream consumer adoption, Kin has the potential to become one of the most adopted and used crypto-currencies in the world, the company said. (Reporting by Gertrude Chavez-Dreyfuss; Editing by Paul Simao)
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