Crypto.com planned to launch its trading services in South Korea on April 29.
The company had acquired OK-BIT and PnLink for regulatory compliance.
Despite the temporary halt, the company remains committed to navigating challenges to eventually enter the country.
Crypto.com has decided to halt its plans to enter the South Korean market temporarily.
The move comes as the company faces regulatory challenges in one of the world’s most vibrant cryptocurrency hubs.
Crypto.com facing regulatory hurdles despite acquisitions
Earlier this month, Crypto.com announced its plans to enter the South Korean market, to offer South Korean customers access to a wide range of cryptocurrencies and exclusive non-fungible token (NFT) projects.
The company had made significant strides towards establishing its presence in South Korea by acquiring two local cryptocurrency firms, OK-BIT and PnLink in August 2022. However, the operating license acquired through the acquisition of OK-BIT will be expiring in November and Crypto.com intended to launch on April 29 so as to be operational by the time the OK-BIT license expires.
However, despite initial enthusiasm, Crypto.com has encountered regulatory challenges that have forced it to put its South Korean expansion on hold. To start with, OK-BIT was not qualified to offer fiat-to-crypto services meaning Crypto.com requires to meet more stringent compliance requirements to become fully compliant in the country.
In addition, local sources are reporting that South Korea’s Financial Intelligence Unit (FIU), which operates under the Financial Services Commission, found issues with the anti-money laundering data submitted by Crypto.com thus prompting the FIU to start an on-site inspection immediately.
There are also reports that the FIU did not approve a key leadership change at Foris DAX Korea Limited, the entity behind Crypto.com’s operations in South Korea. However, a company spokesperson has cleared the air saying that te company was working to update some of its directors of its local entity, as a procedural formality, and it has no impact on the exchange’s ability to launch its app in South Korea on April 29th.
In a recent email, the company acknowledged the difficulties faced by foreign exchanges in breaking into the South Korean market but reiterated its commitment to collaborating with local regulatory authorities to navigate through the complexities.
Crypto.com remains optimistic about its prospects in South Korea and recognizes the market’s tremendous potential and the opportunities it presents for growth. It aims to eventually make its mark in one of the world’s most dynamic cryptocurrency markets after addressing regulatory concerns and fostering cooperation with local authorities.
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