Crypto.com’s South Korean launch will be delayed due to anomalies in the platform’s money laundering data, as regulators have identified.
Crypto.com’s data contained Anti-Money Laundering (AML) vulnerabilities, prompting South Korean authorities to conduct an “emergency on-site inspection” to oversee the cryptocurrency exchange’s activities. A Financial Services Commission (FSC) representative informed the local publication Segye Ilbo:
“We found concerns related to the prevention of money laundering activities in the submitted materials.”
Six days before the exchange’s scheduled launch in the region, on April 23, the Financial Intelligence Unit (FIU), which operates under the South Korean FSC, initiated an emergency on-site inspection.
Before this, Crypto.com acquired a domestic virtual asset business license (VASP) in South Korea by acquiring OKBit, a local cryptocurrency exchange.
The organization subsequently verified that it would postpone the April 29th launch to collaborate with regulators on elucidating its established anti-money laundering protocols.
“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.”
“We will delay our launch to ensure Korean regulators have a comprehensive understanding of our policies, procedures, systems, and controls,” stated the Crypto.com spokesperson.
South Korean financial authorities also intend to prohibit listing digital assets involved in hacking incidents on domestic exchanges, pending a comprehensive determination of the underlying cause via implementing new guidelines.
Before listing, the forthcoming regulations will also mandate that all foreign digital assets publish a white paper or technical manual for the South Korean market. Tokens listed on a licensed exchange for more than two years may not be required to comply with these new standards.
Token issuers who neglect to disclose critical information sufficiently may face delisting from exchanges. The Financial Supervisory Service has been developing listing guidelines with the assistance of stakeholders, including the Digital Asset Exchange Association, since the latter part of 2023.
