According to Reuters, Kakao Corp, South Korea’s largest messaging app operator, said on Monday it is planning to establish a unit focusing on blockchain technology. Plans for the unit, set to be established this month, include a potential so-called reverse initial coin offering where an established firm raises capital through offering cryptocurrency.
Normally entrepreneurs usually launch their own initial coin offerings for software they are building, but Kakao as an established firm is seeking a “reverse ICO” to further expand its sprawling business possibly mimicking the recent US$1 billion ICO of the messaging company Telegram.
Sources say Kakao Blockchain will lead ICOs of Kakao and its affiliates in overseas markets because the Korean authorities are not allowing an ICO to regulate the overheating crypto trading and protect investors. Kakao said Han Jaesun, co-founder of local startup accelerator FuturePlay Inc, is expected to lead the new unit.
Shares in Kakao fell 3.5 percent on Monday, a slide that analysts said was part of overall weakness in South Korean shares amid worries about a U.S. trade war. The main Kospi index closed down 1.1 percent.
In February, Kakao raised about US$1 billion through global depositary receipts on the Singapore Exchange. Investors reportedly showed keen interest in the firm’s immensely popular KakaoTalk and related mobility services like KakaoTaxi and KakaoNavi.
Crypto commentators had predicted Kakao’s possible move into the blockchain market as it owns part of Upbit, one of South Koreas largest crypto exchanges. Kakao, along with its venture capital unit K Cube Ventures, owns a combined 23 percent stake in Upbit.