The Chairman of South Korea’s Financial Services Commission (FSA) has hit out over the planned ICO from the country’s popular mobile messaging app, KaKao.
Choi Jong-gu told a press conference on Wednesday that he maintained “a negative stance” to the proposed KaKao ICO.
Admitting that he could not do much to stop the overseas ICO taking place, Choi said: “It is difficult for KaKao, the main shareholder of the Kakao bank, to lend credibility to the KaKao bank during the ICO”.
Last week, KaKao announced plans to launch a blockchain subsidiary under the working title of “KaKao blockchain”. The ‘KaKao Coin’ could be used as the native monetary unit for the company’s various business ventures. A business plan for the blockchain is set to be released next Tuesday.
Seoul is concerned that Initial Coin Offerings – ICOs – are used as a front to launder money and banned them from taking place in its jurisdiction in September. The upcoming KaKao ICO could be held through one of the company’s overseas subsidiaries, possibly in Hong Kong or Singapore.
Speculation of a comprehensive cryptocurrency crackdown in South Korea led to a huge run on coins in mid-January, ending a month-long boom period for the crypto-market. Founded in 2014, Kakao has multiple business ventures including the taxi-hailing app KaKao T, KaKaoPay, a mobile e-wallet service and KaKaoTalk, a messaging application and the company’s biggest app, having been downloaded 49m times in 2017. The KaKao Coin could be used as a native currency for in-app purchases.
The encrypted messaging platform, Telegram made waves earlier this year when it announced plans to launch its own blockchain and native currency. A closed ICO pre-sale was held last month which reportedly raised upwards of $850m from 51 investors. A public ICO is set to take place at some point this year.
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