Crypto.com, a prominent cryptocurrency exchange, has delayed the launch of its app in South Korea due to regulatory scrutiny over its anti-money laundering (AML) practices. The postponement comes in response to an emergency on-site inspection initiated by Korean financial authorities, as reported by local media outlet Segye Ilbo.
Anti-Money Laundering Concerns
The Financial Intelligence Unit, operating under the Financial Services Commission, conducted the inspection following concerns regarding anti-money laundering practices discovered in the data submitted by Crypto.com.
While the exchange has emphasized its commitment to maintaining stringent AML standards, it has decided to postpone the launch of its new service to ensure full compliance with Korean regulatory requirements.
According to a report by Coindesk, Crypto.com asserts that it adheres to the “highest” standards of AML practices. Nevertheless, it recognizes the importance of addressing the concerns raised by Korean regulators by providing them with a comprehensive understanding of its policies, procedures, systems, and controls.
Delayed Launch and Regulatory Hurdles
The exchange had previously announced plans to launch a local mobile application facilitating coin trading in South Korea. The service, promising competitive pricing and support for various virtual asset transactions, was scheduled for release next week. However, regulatory hurdles have proven to be a significant challenge for Crypto.com.
Crypto.com obtained approvals to operate in South Korea back in 2022. However, the recent regulatory scrutiny has forced the exchange to postpone its plans for expansion in the Korean market.
Eric Anziani, Chief Operating Officer of Crypto.com, Comments
Earlier this month, Crypto.com had announced its decision to debut the new app in South Korea. Eric Anziani, the Chief Operating Officer of Crypto.com, highlighted the tech-savvy population of Korea and its inclination towards innovation as key factors driving this decision.
Anziani stated, “The first product we will be launching in Korea is the crypto.com app, which is our most popular product globally. It’s a fully mobile product offering a convenient and safe way to buy, sell, and store digital assets, including non-fungible tokens, enabling Korean customers to access global prices in a regulated manner.”
Moreover, Crypto.com aims to support Korean creators and artists through potential partnerships, leveraging the country’s influence as a cultural powerhouse. The company is currently in discussions with local banks to establish partnerships for account authentication, a regulatory requirement in Korea.
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Presently, the Korean cryptocurrency market has five won-based exchanges authorized by financial authorities. By entering this market, Crypto.com aims to offer users an alternative trading platform while fostering competition and innovation in the local cryptocurrency sector. However, navigating the stringent regulatory landscape remains a significant challenge for the exchange.