Crypto.com’s highly anticipated entry into the Korean market faces indefinite postponement due to regulatory challenges, marking a setback for the global cryptocurrency exchange.
In an announcement made on Tuesday evening, Crypto.com revealed the delay of its scheduled launch in Korea, originally slated for April 29. The decision came in the wake of an emergency on-site inspection conducted by the Financial Intelligence Unit (FIU) on the same day.
The FIU, a regulatory agency tasked with overseeing illicit financial activities under the purview of the Financial Services Commission, flagged concerning elements in Crypto.com’s anti-money laundering protocols. The agency deemed certain aspects of the documentation submitted by the exchange necessitated on-site verification.
Crypto.com had laid groundwork for its entry into the Korean market, having acquired full ownership of the domestic exchange OKBit in 2022. The exchange had ambitious plans to introduce its app in Korea, with future aspirations to facilitate trading in the Korean won. Earlier this month, Crypto.com President Eric Anziani had personally unveiled the strategy during a press conference in Korea.
In response to the money-laundering concerns raised by regulatory authorities, Crypto.com pledged to provide detailed insights into its comprehensive policies, procedures, systems, and regulatory compliance measures.
“Crypto.com adheres to the highest industry standards for preventing money laundering,” affirmed the exchange. “While navigating the challenges associated with entering the Korean market as a global cryptocurrency exchange, our firm remains committed to fostering responsible industry development in collaboration with Korean regulatory bodies.”
The regulatory hurdles encountered by Crypto.com echo similar challenges faced by other foreign virtual asset exchanges attempting to establish a presence in Korea. Binance, the world’s largest cryptocurrency exchange, encountered resistance in its efforts to enter the Korean market through the acquisition of a stake in GOPAX in January. The FIU has refrained from granting approval, citing legal risks associated with Binance’s management.
Industry insiders note the FIU’s stringent stance on money laundering risks associated with exchanges and anticipate continued vigilance in regulating foreign exchange platforms seeking entry into the Korean market.
The delay in Crypto.com’s market entry underscores the complex regulatory landscape governing cryptocurrency exchanges and highlights the ongoing efforts to ensure compliance and mitigate financial risks within the evolving digital asset ecosystem.
