Crypto.com Battling Regulatory Hurdle Amid Korean Leadership Haul

It was exciting news as the global digital asset exchange, Crypto.com announced on April 2nd that they would be launching a local trading platform in South Korea, one of the largest crypto markets hosted in the world. The crypto exchange aims to fill the void left by the winding down of OK-BIT, a licensed crypto exchange that Crypto.com acquired in 2022.

However, South Korean local media has reported that Crypto.com has hit a little snag entering its crypto market. The Financial Intelligence Unit of South Korea (FIU) decided to delay the approval of their leadership transition as they were supposed to pass the torch from Co-founder Rafael Melo to President and COO Eric Anziani. 

Crypto.com faces more regulatory hurdles

Foris DAX Korea Limited, the South Korean company that Crypto.com acquired, actually made a change in leadership on January 25th. The FIU has this rule where crypto companies have to report such changes within 30 days, however, the crypto exchange could not meet this requirement as they filed the report in February. 

The operating license obtained by OK-BIT is set to expire in November and Crypto.com will need to renew the license. However, since OK-BIT didn’t meet the qualifications for launching a fiat-to-crypto platform, Crypto.com will have to meet stricter local compliance requirements to operate fully in the country. 

Overcoming Hurdles, Launching Strong

Amidst the challenges, the digital asset exchange has shared that is moving forward with the planned launch as it is working on meeting the specific compliance requirements for the license renewal process ensuring robust security measures, implementing effective anti-money laundering (AML) and know-your-customer (KYC) procedures, maintaining proper record-keeping practices, and demonstrating compliance with relevant financial regulations. 

By addressing these specific requirements, Crypto.com aims to meet the necessary standards, successfully renew its license, and continue its operation in the country. 

Binance is also not problem-free

Crypto.com’s arrival introduces a new contender in the fiercely competitive crypto market of South Korea. Similar to Binance’s move last year, it acquired a significant stake in Gopax, a local exchange facing liquidity hurdles. Gopax is among the country’s five licensed exchanges, facilitating fiat-to-crypto transactions. 

Binance has been working towards addressing compliance matters locally by intending to reduce its stake in Gopax. In March, Binance CEO Richard Teng visited South Korea and held discussions with financial regulators as the transfer of ownership within Gopax has faced multiple delays from South Korean authorities, allegedly due to concerns over Binance’s legal matters in the United States.