A prominent early Canadian crypto experiment has hit another major snag. Ted Livingston, the founder and chief executive of the erstwhile Waterloo, Ont.-based messaging app Kik, and the team at his new startup Code have publicly split from the Kin Foundation, a non-profit created to support a crypto token that Kik launched in 2017. Here’s what you need to know.

The background: Kik was a darling of the Canadian tech community in the mid-2010s, and Livingston played the Canuck Mark Zuckerberg with his uniform of a hoodie and jeans. Livingston originally envisioned Kik as a music app for BlackBerry users, but the mobile-device company instead sued it for patent infringement. As a messaging app, Kik found success among teens who liked the ability to register without a phone number. It became known for cutting-edge experimentation, such as an early experiment with chatbots.

Kik’s pivot to crypto took its reputation for out-there experimentation even further. Kik launched a US$100-million initial coin offering for its crypto token Kin in 2017, which TechCrunch lauded as “the highest-profile ICO to date.” Kik was trying to solve a problem that every other internet business without billions of users was also facing: How to generate revenue without competing for advertising dollars with the likes of Google and Facebook. The idea—a brand new one, at the time—was to incentivize Kik users by paying them in Kin for creating content, driving growth and engagement in the app and make Kin more valuable in the process.

Livingston became a director of the Kin Foundation, which was formed to oversee Kin’s supply and distribution. The ICO allocated 60 per cent of the total supply of Kin to the foundation, which it spent on grants to developers and other things in support of the crypto token’s economy.

Things went downhill quickly. In 2019, the U.S. Securities and Exchange Commission sued Kik over the Kin ICO, prompting Kik to terminate the vast majority of its staff, shut down its app and focus on the development of a mobile wallet for Kin. Kin attracted some app development and brand partnerships and enjoyed a brief price spike during the crypto bull run of 2021, but never really took off. On Feb. 1, just before Livingston and company parted ways with Kin, its market capitalization was about US$17 million.

The situation has deteriorated further. In a blog post earlier this month, Livingston said he and the Code team decided to “fork,” or split, the Kin blockchain, creating a new crypto token called Bits. Livingston and Code made the decision because of “a disagreement at the Kin Foundation” and Livingston’s pending removal from the board, he said. The staff of the Kin Foundation have been terminated.

The disagreement appears to be partly over Kin’s 2023 budget. According to Livingston, the Kin Foundation’s other two board members, William Mougayar and Matt Hannam, wanted to increase the budget despite his objections. Livingston also cited concerns that the Kin Foundation was not properly managing inflation in the token’s internal economy. A now-deleted post from Mougayar said the Kin Foundation increasingly found Livingston to be inflexible and unwilling to listen to opposing views. Neither Livingston, Mougayar nor Hannam responded to requests for comment. 

After all that, Livingston is once again trying to revive Kin. In his post, he said that now that the Kin Foundation has been disbanded, his concerns about inflation are resolved, so Code will abandon Bits and go back to using the original crypto token. In a Twitter Space, members of the Kin community expressed frustration with how the various parties had handled the situation. “There is no bigger fumble in crypto than this,” tweeted Adam Cochran, a partner at Cinneamhain Ventures and an early contributor to the Kin community.

Correction: Kik was already a messaging app when BlackBerry sued it for patent infringement. This story has been updated.