Crypto.com, a Singapore-based cryptocurrency exchange, has delayed its planned expansion into South Korea following concerns raised by local regulators about potential money laundering activities.
The South Korean authorities, after reviewing the data submitted by Crypto.com, initiated an “emergency on-site inspection” due to Anti-Money Laundering (AML) issues identified.
A representative from the Financial Services Commission (FSC) conveyed the regulatory concerns to the media, stating, “We found concerns related to the prevention of money laundering activities in the submitted materials.”
The inspection by the Financial Intelligence Unit (FIU), which is part of the FSC, started on April 23, a few days before the exchange’s intended launch date in South Korea.
This proactive regulatory action underscores the stringent oversight in the South Korean financial sector, particularly concerning AML protocols.
Prior to these developments, Crypto.com had successfully obtained a virtual asset business license (VASP) in South Korea by acquiring a local cryptocurrency exchange, OKBit.
This was part of the platform’s efforts to penetrate the South Korean market, which is known for its tough regulatory environment for international exchanges.
Responding to the regulatory intervention, a spokesperson from Crypto.com announced the postponement of their launch originally scheduled for April 29.
The company expressed its commitment to compliance and cooperation with South Korean regulators: “Korea is a difficult market for international exchanges to enter, but we are committed to working with regulators to advance the industry responsibly for Koreans.”
READ MORE: As PEPE Leads, DOGE Accelerates, a New Player is Steering Toward Success
They also emphasized the intention to use the delay to ensure that Korean regulators are fully aware of Crypto.com’s AML measures, stating, “We will postpone our launch and take this opportunity to make sure Korean regulators understand our thorough policies, procedures, systems, and controls.”
Furthermore, South Korean financial authorities are taking additional steps to strengthen market integrity by planning to impose restrictions on the listing of digital assets associated with hacking incidents unless the root causes are clearly identified.
New regulatory guidelines will also demand that all foreign digital assets seeking listing in South Korea must publish a white paper or technical manual specifically for the local market.
However, tokens that have been listed on a licensed exchange for more than two years might be exempt from these new requirements.
The Financial Supervisory Service has been active in shaping these guidelines since late 2023, collaborating with stakeholders like the Digital Asset Exchange Association to ensure comprehensive regulatory frameworks that enhance transparency and protect investors.
Token issuers failing to disclose essential information risk being delisted from exchanges, reinforcing the country’s commitment to stringent regulatory oversight.
To submit a crypto press release (PR), send an email to sales@cryptointelligence.co.uk.
