KOREAN MESSENGER KAKAO HOLDS A CLOSED ROUND OF ICO

South Korean Internet conglomerate Kakao, which owns 90% of the market share, launched an ICO campaign in Japan to Finance the Clay blockchain initiative.

In March, the Internet conglomerate Kakao announced plans for international expansion, involving the creation of its own blockchain platform. The company first opened an office in Switzerland, but later decided to launch the Ground X project in Japan. Ground X, a subsidiary of the South Korean company, launched a testnet of  own blockchain platform Klaytn in October.

On November 19, the company announced its intention to raise $ 300 million to issue its own token. At the same time, a source familiar with the course of the case said that most of the investments have already been collected, including financing from Chinese investors:

“The target amount is $ 300 million, and Kakao is already very close to achieving the goal. Chinese venture companies have already met with Ground X in September.”

Conducting closed sales, where only accredited or institutional investors can participate, the company took into account the regulatory systems of Japan, South Korea and the United States. Kakao chose Japanese jurisdiction because of the significant obstacles in South Korea faced by the country’s cryptocurrency companies.

Despite the fact that the government of South Korea tripled the budget for blockchain development up to 35 million dollars, the financial regulator allowed the country’s banks to work with cryptocurrency exchanges, and at the end of October, the authorities promised to lift the ban on ICO in the country.  Earlier it was reported that the government of South Korea “most likely” will announce an official position on ICO in November, but this did not happen.

In July, the head of the South Korean regulator FSC did not approve Kakao’s plans to hold a public ICO and the idea of raising funds from foreign markets, citing on “very high risk” in terms of protecting investors. However, from the point of view of the company, despite the fact that raising funds “can be regarded as a public sale”, it is not, as the campaign “is not available for individual investors, it involves only partner institutions of Kakao”. But the company can not disclose the data of the partners until the finalization of the investment round, explained the representative of the company. As a result, the company held a closed round in Japan.

Recall that in January, direct competitor Kakao, Line, owned by Korean company Naver, also founded Line Financial Corporation in Tokyo to launch its own application for crypto trading, credit platform and insurance platform. As a result, the two largest companies in the industry preferred the Japanese jurisdiction over South Korean.