South Korea’s largest Internet conglomerate, Kakao, which has nearly 90 percent market dominance, launches the Initial Coin Offer (ICO) to raise funds for its blockchainBlockchain
is a continuous and sequential block chain of information (digital linked list). When building a blockchain, copies of related blocks are simultaneously stored on multiple computers.Details project called Clay.
On November 19, The Hankyoreh, a business-oriented magazine in South Korea, announced that Kakao plans to raise about $ 300 million to develop its own tokenToken
– is an accounting unit that is used to represent a digital balance in an asset.Details.
Most of the funds have already been provided by Ground X, a subsidiary of Kakao, which focuses on blockchain operations. The source added that the Chinese venture capital company is also involved in the sale of tokens.
In private sale, only registered, accredited and approved institutional investors can invest in the sale of Kakao tokens. Given that all Kakao’s meetings with accredited investors were held confidentially, the company planned a fundraising way so that it did not break the rules in Japan, South Korea and even the United States.
On November 27, Jay Clayton, chairman of the US Securities and Exchange Commission (SEC), said that the vast majority of ICOs, which are currently in the global cryptocurrency market, are securities in accordance with current US laws. Clayton stressed that if companies plan to raise funds through token sales, firms must either register with the SEC or conduct a private sale.
Companies prefer not to conduct private sales of tokens if they are not sure that the product, they offer will attract large investors, since private sales are just as difficult from a legal point of view as raising venture capital funding.
It can be argued that with the involvement of local financial institutions and, possibly, the
SEC, conducting a private sale of tokens is more resource-intensive than the traditional round of venture capital funding.
For Kakao, it was extremely important to follow both local and international rules, and not just collect the target amount of funding. This naturally led to the conglomerate conducting a private rather than a public sale, which could be more profitable.
Editor: Alyona Nabok