Key takeaways:
- Following regulators’ discovery of abnormalities related to money laundering in the platform’s data, Crypto[.]com chose to delay its launch in South Korea.
- After purchasing the local cryptocurrency exchange OKBit, Crypto[.]com was able to secure a domestic VASP in South Korea earlier.
Following regulators’ discovery of abnormalities related to money laundering in the platform’s data, Singapore-based cryptocurrency exchange Crypto[.]com chose to delay its launch in South Korea.
After discovering issues with Anti-Money Laundering (AML) in the information provided by Crypto[.]com, South Korean authorities initiated an “emergency on-site inspection” to keep an eye on the exchange’s operations. A Financial Services Commission (FSC) representative told Segye Ilbo, the local media:
“We found concerns related to the prevention of money laundering activities in the submitted materials.”
Six days prior to the exchange’s scheduled opening in the area, on April 23, the Financial Intelligence Unit (FIU), which is housed under the South Korean FSC, began an urgent on-site assessment.
After purchasing the local cryptocurrency exchange OKBit, Crypto[.]com secured a domestic virtual asset business license (VASP) in South Korea earlier.
Later, the company announced that it would postpone the planned debut on April 29 and collaborate with authorities to provide an explanation of the anti-money laundering procedures it had implemented.
“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.”
Financial regulators in South Korea also intend to restrict listing digital assets linked to hacking incidents on local exchanges until the core reason is fully identified through new regulations, which should be implemented soon.
Before being listed, all foreign digital assets will also need to issue a white paper or technical manual specifically for the South Korean market, according to the proposed laws. Tokens listed on a licensed exchange for more than two years could not be required to fulfill these additional requirements.
Issuers of tokens who neglect to provide sufficient disclosure of critical information risk having their tokens removed from exchange lists. The Financial Supervisory Service has been developing listing guidelines since the later half of 2023, requesting input from various stakeholders, including the Digital Asset Exchange Association.
