Regulatory Obstacle Hampers Crypto.com’s Entry into South Korean Market

Singapore-based cryptocurrency exchange Crypto.com has decided to postpone its launch in South Korea after regulators discovered potential money laundering issues in the platform’s data. The Financial Intelligence Unit (FIU), which operates under the South Korean Financial Services Commission (FSC), initiated an emergency on-site inspection after identifying Anti-Money Laundering (AML)-related problems in the data provided by Crypto.com. This inspection took place just six days before the exchange’s scheduled launch in the region. Crypto.com had previously obtained a domestic virtual asset business license (VASP) in South Korea by acquiring a local crypto exchange called OKBit. The company has now confirmed that it will delay its upcoming launch on April 29 and will work with regulators to address the AML measures it has implemented. South Korean financial authorities are also planning to introduce new regulations that will prohibit listing digital assets involved in hacking incidents on domestic exchanges, unless the root cause has been thoroughly investigated. Additionally, all foreign digital assets will be required to publish a white paper or technical manual for the South Korean market prior to listing. However, tokens listed on a licensed exchange for more than two years may be exempt from these new criteria. Token issuers that fail to disclose essential information adequately may face delisting from exchanges. The Financial Supervisory Service has been working on listing guidelines since late 2023, gathering input from stakeholders such as the Digital Asset Exchange Association.