Crypto.com delays South Korean launch to address regulatory concerns

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23rd April 2024 – (Seoul)Gglobal cryptocurrency exchange Crypto.com has decided to delay its highly anticipated launch in South Korea. The decision comes as the company seeks to enhance its communication with local regulators to ensure full compliance with South Korean regulatory standards.

The postponement was announced following a visit by South Korea’s Financial Intelligence Unit (FIU) to Crypto.com’s local office. The visit was reportedly prompted by issues found in the company’s documentation related to anti-money laundering practices, according to a local news source, Segye Ilbo.

Originally scheduled for 29th April, the launch was set to coincide with the closure of the South Korean licensed crypto exchange OkBit, whose operations are winding down by the end of the month. Crypto.com had planned to step into the local market by launching its trading platform, aiming to capture a significant portion of one of the largest crypto markets globally.

“We are taking this opportunity to ensure that the Korean regulators are fully aware and approve of our robust policies, procedures, systems, and controls,” stated a spokesperson from Crypto.com. “While Korea presents unique challenges for international exchanges, we are dedicated to collaborating with the regulators and advancing the industry in a responsible manner.”

The delay highlights the complexities and regulatory hurdles that international crypto exchanges face when trying to enter the South Korean market. The country has stringent regulations for cryptocurrency operations, including a near prohibition on foreign exchanges offering services to local investors without proper local establishment.

Crypto.com had previously acquired OkBit in an effort to secure its foothold in the Korean market. However, since the acquisition, the platform has not onboarded any new Korean customers, limiting user activity to withdrawals only. At the time of acquisition, OkBit had approximately 900 active customers and had no history of anti-money laundering infractions.

South Korea is known for its rigorous regulatory environment that governs cryptocurrency exchanges. The country’s approach is part of a broader strategy to curb potential financial crimes and enhance investor protection in the crypto space. Approximately one-tenth of the South Korean population is engaged in cryptocurrency investments, reflecting the high stakes involved in regulatory compliance.

The situation regarding Crypto.com’s revised launch date remains uncertain, as the company has yet to announce a new timeline. Requests for further details from both Crypto.com and the FIU have not been answered as of the latest updates.