South Korea has established regulations that every Crypto trading account should have a complete KYC. In my opinion initial coin offerings should also have KYC for every investor to be regulation compliant. Thus, terror financing will reduce to a great extent through cryptocurrency.
That's a good initiative they have taken since this might stop many criminal activities. I believe not only the customers but also the creators and developers of the particular ICO should have KYC documents submitted to some trusted authorities since this will show their genuity and will give the investors a better insight about the people they are going to give their money to. Although this a tough thing to do since a trusted authority will mean that it will be a centralized processed but the necessary steps similar to this should definitely be taken.