December 04, 2024

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[THE INVESTOR] Kakao is seeking to launch its own virtual currency soon to raise money for new blockchain projects, industry sources said on March 5.

The internet giant plans to set up a new affiliate, tentatively called Kakao Blockchain, as early as this month. Jason Han, a KAIST graduate and CTO of Futureplay, a Korean startup accelerator, has been named the CEO. 

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Programmers or 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.

More Korean companies are likely to seek an overseas ICO that allows them to raise funds in a short time without affecting the stock value of existing shareholders.

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.

Industry watchers had predicted Kakao’s possible foray into the blockchain market considering its close ties with Upbit, one of the nation’s largest crypto exchanges. Kakao, along with its venture capital unit K Cube Ventures, owns a combined 23 percent stake in Upbit. Kakao's former CEO Lee Sir-goo recently joined the exchange as CEO.

By Lee Ji-yoon (jylee@heraldcorp.com)