April 19, 2024 — Crypto.com’s highly anticipated entry into the Korean market has been postponed indefinitely due to regulatory challenges, particularly concerning its anti-money laundering (AML) practices. The global cryptocurrency exchange announced the delay on Tuesday, just days before its scheduled launch on April 29.
Crypto.com, a major player in the global cryptocurrency exchange arena, faces regulatory scrutiny from South Korea’s Financial Intelligence Unit (FIU), which is responsible for combating unlawful financial activities. The FIU operates under the Financial Services Commission, the primary regulatory authority in Korea.
The delay comes after the FIU initiated an emergency on-site inspection of Crypto.com’s operations. The regulatory body expressed concerns over suspicious elements in the exchange’s AML practices, prompting further investigation and verification of the submitted documents. This intervention has led to an indefinite postponement of Crypto.com’s planned expansion into the Korean market.
The launch was originally set for April 29, 2024, but the plans were halted following the FIU’s inspection on the same day as the announcement of the delay. Crypto.com had been preparing for this launch since acquiring 100 percent ownership of the domestic exchange OKBit in 2022.
The expansion was aimed at integrating into the South Korean market, with future aspirations to engage in Korean won-based trading. Crypto.com’s regional activities and compliance efforts are now under scrutiny in Korea, a country known for its stringent financial regulatory environment.
South Korea’s strict regulatory stance on money laundering risks associated with cryptocurrency exchanges is the primary reason for the postponement. The FIU’s concerns about Crypto.com’s compliance with AML standards reflect ongoing regulatory efforts to ensure that financial practices within the crypto market align with national and international legal frameworks.
In response to these regulatory concerns, Crypto.com has committed to thoroughly detailing its AML policies, procedures, systems, and controls to the FIU. The company stated, “Crypto.com operates according to the industry’s highest standards for money laundering prevention,” emphasizing its intention to continue collaborating with Korean regulators to responsibly develop the cryptocurrency industry within the country.
This development follows similar regulatory challenges faced by other foreign exchanges, such as Binance, which has also struggled with gaining approval from the FIU to operate in Korea. This situation highlights the rigorous regulatory environment in Korea that foreign exchanges must navigate to gain market access.
