It was added along with Phase 6 of the SVN update, not much detailed were given however except that the NPC is located next to Geffen Tower.
What does it do? I'll answer this question now, he makes the Tower Hats! ^_^
Those are Light / Dark hats of course. What is required to make them? Many things, go talk to the NPC to find out
I'll add more information as time goes, and hopefully as the quest is started and eventually completed by some heroes.
First Tower completed by Bloody, Light way.