Crypto.com, a well-known cryptocurrency exchange, has put on hold its plans for entering the South Korean market. This decision was made following a visit from the South Korean Financial Intelligence Unit (FIU) to Crypto.com’s local office in late April. The FIU’s inspection may have brought up questions about the exchange’s adherence to Anti-Money Laundering regulations, leading to this delay.
In the southern part of Korea, there is a vibrant crypto market, home to one of the biggest digital currency investing populations in the world, numbering around ten percent of the total population. Yet, this prosperous industry is subjected to stringent regulations. International cryptocurrency exchanges such as Crypto.com and Binance have reported significant hurdles when attempting to penetrate the Korean market directly.
“Entering the Korean market for external businesses is challenging, as acknowledged by a representative from Crypto.com in a statement given to Coinspeaker. However, we remain dedicated to collaborating with regulators and promoting the crypto industry in a responsible manner for the benefit of Koreans.”
Crypto.com Faces AML Compliance Issues in Korea
Crypto.com revealed intentions to debut a local cryptocurrency trading platform in South Korea on April 2nd. The objective is to address the void created by the termination of OkBit, a homegrown exchange that Crypto.com purchased. At the time of acquisition, OkBit was said to have approximately 900 users. However, it’s important to note that Crypto.com has not added any new South Korean customers since the acquisition.
At the time of the takeover by Crypto.com, OkBit had around 900 clients, and there have been no reports of any violations of Anti-Money Laundering (AML) regulations against OkBit.
After Segye Ilbo, a South Korean newspaper, reported that authorities inspected Crypto.com’s local office on April 23rd, it was disclosed that the Financial Intelligence Unit (FIU) found issues with the company’s documents regarding anti-money laundering compliance.
South Korea’s AML and KYC Demands
In simpler terms, strict rules in South Korea present challenges for international cryptocurrency exchanges. Yet, these regulations demonstrate South Korea’s dedication to mitigating financial risks related to digital currencies. To legally operate in South Korea, crypto exchanges must provide evidence of strong anti-money laundering and customer identification procedures (KYC).
Despite the rigorous supervision, this may in fact foster progress. South Korea has taken the lead in establishing regulations for cryptocurrency exchanges. Their strategy could pave the way for a safer and more accountable crypto market landscape on a global scale.
It’s intriguing to observe how Crypto.com interacts with South Korean regulatory bodies, addressing any obstacles that may arise and possibly adjusting their strategies to meet local regulations. Such actions from Crypto.com could serve as a model for other global cryptocurrency exchanges aiming to establish a presence in this significant market.
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2024-04-23 18:08