According to recent media reports, Kakao Corp, a South Korean internet giant, is planning to raise funds through Initial Coin Offerings (ICOs) overseas. The company, which operates South Korea’s most popular chat application called Kakao Talk, also plans to issue its own coin called Kakao coin. While responding to this media report, the country’s top financial watchdog, reportedly said that ICOs could violate the current crypto regulations in the country.
ICOs overseas may still violate South Korean laws
This week at a press briefing that was held in Seoul at a government building, Choi Jong-Ku, chair of the country’s Financial Service Commission, described the agency’s assessment of the company’s ICO situation. Mr. Jong-ku said that “although media reports are claiming that Kakao Corp and Kakao Pay plan to raise funds using Initial Coin Offerings abroad, financial agencies are yet to confirm the reports.” The chair emphasized that “no ICO funding has been confirmed,” a local media source, the Financial Daily, reported.
Mr. Jong-ku reiterated that “current Korean laws don’t prohibit Initial Coin Offerings abroad, but it is very likely to violate the existing legislation,” the media source conveyed. Noting that Kakao Corp is among the major shareholders of Kakao Bank, the chair explained that the firm’s ICOs abroad “may lead to an issue of credibility of the bank.”
No Cut News reportedly quoted Mr. Jong-ku to have said that “even though virtual currency is not prohibited at present, there is a significant possibility that it may be considered similar to fraud. According to its issuance method, it may also be regarded as multi-level sales. Because the risks are very high as regards to investor protection, the South Korean government currently holds a negative stance on Initial Coin Offerings.”
Kakao Corp says no formal ICO plans yet
On Friday, the South Korean Economic Daily quoted an anonymous Kakao official saying that the company is yet to release plans for the Initial Coin Offerings formally. “As far as Kakao’s ICOs is concerned, there is still nothing for determination,” the official pointed out. Meanwhile, the daily revealed that a message allegedly pre-selling the company’s coin (Kakao Coin) is already making rounds on various social media platforms. Kakao Corp termed it as an “obvious fraud.”
Another official from the firm reportedly said that the company has been making plans for a blockchain business, adding that “cryptocurrencies are inevitably needed for activation of the blockchain platform business, but the schedule for the development is yet to be determined.”
While South Korean authorities have already banned Initial Coin Offerings in the country, “there are no clear regulatory guidelines or regulations since the National Assembly is yet to pass relevant legislation,” another local media source, Se daily, detailed. The daily quotes the FSC’s chair, Mr. Jong-ku to have asserted that “Initial Coin Offerings are highly likely to be fraudulent and multi-level depending on the digital currencies’ issuance methods.” He added that “as far as Initial Coin Offerings in Korea is concerned, there are problems in the domestic laws and thus there are high risks in protecting investors.”
