Crypto.com has postponed a planned launch in South Korea following a report by the local news outlet Segye Ilbo, which stated that the exchange platform was undergoing an “urgent on-site inspection” due to concerns over money laundering.
According to the report, South Korea’s Financial Intelligence Unit (FIU), which operates under the Financial Services Commission, found issues with the anti-money laundering data submitted by the exchange. This prompted the FIU to start an on-site inspection immediately.
“Crypto.com maintains the highest Anti-money Laundering (AML) standards in the industry. We will postpone our launch and take this opportunity to make sure Korean regulators understand our thorough policies, procedures, systems and controls, which have been reviewed and approved by major jurisdictions around the world,” the exchange said in a statement.
Earlier last week, Crypto.com refuted reports from South Korean media that suggested a regulatory hurdle might delay its expansion in South Korea.
Reports from local news source Bizwatch claim that the Financial Intelligence Unit (FIU) of South Korea was holding up approval for a key leadership change at Crypto.com’s local branch, which could impact the debut of a new trading platform.
Crypto.com, which planned to launch its trading services in South Korea on April 29, acquired the locally licensed crypto exchange OK-BIT in 2022. The launch is intended to replace OK-BIT as it winds down operations. According to Bizwatch, the FIU has not yet approved the transition of executive leadership from Crypto.com co-founder Rafael Melo to President and COO Eric Anziani.
A spokesperson from Crypto.com clarified that the leadership changes were part of routine procedures and would not impact the scheduled launch of their app in South Korea. “We are working to update some of our directors of our local entity, as a procedural formality, and this has no impact on our ability to launch our app in South Korea on April 29th,” the spokesperson stated.
Foris DAX Korea Limited, the entity behind Crypto.com’s operations in South Korea, underwent internal leadership changes on January 25. Crypto companies are required by the FIU to report such changes within 30 days, suggesting that Crypto.com likely filed the necessary documentation in February.
Furthermore, the operating license acquired through the purchase of OK-BIT is set to expire in November, and thus will require renewal. Additionally, as OK-BIT was not qualified to launch a fiat-to-crypto platform, Crypto.com will need to meet more stringent compliance requirements to fully operationalize in the country.
