Bittime - Global crypto trading platform Crypto.com is experiencing obstacles in entering the South Korean market. The local financial regulator, the Financial Intelligence Unit (FIU), postponed approval of a leadership change at their local unit.
Crypto.com Initial Plans
Initially, Crypto.com announced the launch of a local trading platform in South Korea on April 2, 2024. The launch was scheduled for April 29, 2024, as a replacement for the OK-BIT platform that Crypto.com had acquired in 2022 and would end its service in November 2024.
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Delay in Approval of Leadership Change
However, South Korea's FIU delayed approval of the transition of leadership of the local Crypto.com entity, from Co-founder Rafael Melo to President and COO Eric Anziani, as reported by local media Bizwatch. Neither FIU nor Crypto.com has provided an official response regarding this delay.
A report from Bizwatch states that Foris DAX Korea Limited, the South Korean company acquired by Crypto.com, has made internal leadership changes on January 25, 2024.
Considering that the FIU requires crypto companies to report leadership changes within 30 days of the date of the incident, it is likely that Crypto.com would have reported the change in February 2024.
Risk of Delay
It is feared that this delay will make it difficult for Crypto.com to comply with local standards set for crypto companies in the future. The operating license obtained from OK-BIT will expire next November, and Crypto.com needs to renew it.
Additionally, because OK-BIT is not eligible to launch a fiat-to-crypto platform, Crypto.com needs to meet stricter local compliance requirements to fully operate in South Korea.
Despite this, Crypto.com stated to local media that it was proceeding with the launch as planned, and was in active communication with regulators.
Also Read: Cryptocurrency Regulations in South Korea
Similar Case Experienced by Binance
Another giant crypto company, Binance, also faced similar difficulties in entering the South Korean market. Last year, Binance acquired majority ownership in local exchange Gopax, which was experiencing liquidity issues related to Genesis Global Capital.
Gopax is one of five fully licensed exchanges in South Korea, meaning it is permitted to provide fiat-to-crypto services. South Korean authorities have repeatedly delayed approval of Gopax's transfer of ownership, reportedly due to concerns regarding Binance's legal troubles in the United States.
Binance is reportedly working to resolve local compliance issues with plans to step down as Gopax's largest shareholder. In March, Binance CEO Richard Teng was reported by local media to have visited South Korea and met with financial regulators.
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South Korea's Strict Crypto Laws
The delay in approving the change in leadership by the FIU became an initial challenge for Crypto.com to operate in the South Korean crypto market. A similar case experienced by Binance shows that South Korean regulators apply strict compliance standards to foreign crypto companies. It will be interesting to see how Crypto.com and Binance will overcome these obstacles to become fully operational in South Korea.
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Also Read:
South Korea Bans Crypto ETFs Even Though US Gives Permission
South Korea Tightens Regulations on Crypto Asset Listings on Exchanges
South Korea Ready to Ban Crypto Purchases with Credit Cards
DISCLAIMER : This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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