North American social media giant faces difficulties due to SEC Token lawsuit and plans to shut down messaging app and lay off employees.

Recently, it has been reported that a North American social media company is considering shutting down the operations of its messaging app. The company has issued layoff notices to 70 Israeli employees. On September 24, the company's CEO released a statement announcing the closure of the app and the reduction of the workforce to a core team of 19 people.

Since the U.S. Securities and Exchange Commission (SEC) accused the company of issuing $100 million worth of tokens without registration, the company has been legally defending its initial token offering. A senior official from the SEC's enforcement division stated that by selling this token, the company "deprived investors of the legitimate information they should have received and impeded investors from making informed investment decisions."

This company was founded in 2009 by several Canadian students and has received funding support from some well-known investment institutions. In 2017, the company conducted its initial coin offering, raising approximately $98 million, and launched its own virtual currency.

This event has sparked widespread discussion in the industry about the relationship between blockchain startup projects and regulatory authorities. Many cryptocurrency supporters believe that this represents a challenge faced by the entire industry, which needs to find a balance between innovation and compliance.