The Financial Intelligence Unit of South Korea is holding off on approving a new head for Crypto.com’s local branch, which could pose challenges for the exchange as they aim to commence full-scale activities in South Korea.
Around the beginning of April, it was revealed by Crypto.com that they intended to enter the South Korean market, with a launch scheduled for the 29th of the same month. The strategy involves Crypto.com taking over from OK-BIT, a local cryptocurrency exchange that they had acquired towards the end of 2022.
South Korea Yet to Approve Crypto.com Leadership
Based on a report from Bizwatch, a local news platform, Foris DAX Korea Ltd, the company managing OK-BIT, transferred its leadership to Eric Anziani, who is currently the president and COO of Crypto.com, replacing co-founder and CFO Rafael Melo on January 25. The Financial Intelligence Unit (FIU) in South Korea mandates that cryptocurrency businesses report such leadership changes within thirty days as per the Specific Financial Information Act. Therefore, it is assumed that Crypto.com submitted this report to the FIU around February.
According to Bizwatch’s latest update on May 12, Foris DAX’s CEO remains listed as Rafael Melo despite the change being supposedly completed. It’s worth noting that other modifications have been successfully carried out by the FIU within the same timeframe. An example is Korbit crypto exchange, which has already had its board adjustments approved by the FIU.
According to reports, South Korean financial regulators are not welcoming the entry of global crypto businesses into their country, creating a challenge for Crypto.com. Despite this setback, Crypto.com intends to proceed with its launch plans. However, potential obstacles may arise in November when Crypto.com aims to renew OK-BIT’s license.
Sadly, Binance encounters regulatory challenges in South Korea as well. In an attempt to penetrate the local market, Binance acquired a significant share of Gopax, a struggling exchange dealing with liquidity problems. Notably, Gopax is among the few exchanges authorized to provide users with fiat-to-crypto trading services.
Binance Also Battling Local Authorities
Following the takeover by Binance, Gopax sought to restructure its regulatory status with the Financial Services Commission (FSC). Nevertheless, the FSC has yet to grant approval for this modification for more than a year. It is said that the authorities are apprehensive about Binance’s legal issues in the United States, which might be hindering the process.
Binance is currently considering divesting from its significant stake in Gopax by initiating preliminary talks. Previously, during a roundtable discussion in January, Binance’s Asia-Pacific Business Development Director Steve Kim mentioned that Binance intended to exchange their loans given to Gopax for equity. Afterward, they plan on selling these shares to other companies.
South Korea recently introduced stricter rules for crypto exchanges. With implementation expected in May, the rules include a few restrictions, including limiting the tokens that exchanges can list. Specifically, the law bans exchanges from listing any digital assets associated with exploited or scam projects until after thorough investigations and resolutions. In addition, foreign projects looking to list tokens on South Korean exchanges must publish detailed whitepapers or manuals specifically written for the South Korean audience.
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2024-04-19 16:48