Crypto.com, a global crypto exchange, recently postponed its much-anticipated retail market expansion in South Korea, originally scheduled for April 29.
This strategic decision came just six days before the planned launch, and according to the report, this delay is due to the company’s need for more comprehensive engagement with local regulatory bodies.
Regulatory Hurdles And Strategic Responses
Notably, the report suggests that the delay allows Crypto.com to further “refine its approach” and ensure its operations align with South Korea’s regulations, particularly concerning anti-money laundering efforts.
According to a company statement, this period will be used to “enhance” Korean regulators’ understanding of the exchange’s policies, systems, and controls designed to build a responsible and secure trading environment.
The company particularly noted:
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 postpone our launch and take this opportunity to make sure Korean regulators understand our thorough policies, procedures, systems and controls
According to Bloomberg, citing a Korean news organization, Segye Ilbo, the decision followed a visit to Crypto.com’s Seoul office by South Korea’s Financial Intelligence Unit, which expressed concerns over some of the documentation the exchange submitted.
Furthermore, Crypto.com acquired the local platform OkBIT and planned to integrate its services under the Crypto.com brand as part of its Korean market entry strategy. However, following the regulatory feedback, the launch has been deferred indefinitely, with no new date provided.
A spokesperson told Bloomberg:
Crypto.com has not onboarded any new customers in Korea since acquiring OkBit (…) OkBit had around 900 users at the time of acquisition and their access has just been limited to withdrawals.
South Korea’s Stance On Crypto: Surge In Consumer Interest
The postponement occurs amid heightened interest in cryptocurrencies in South Korea. The country plays a significant role in global digital currency trading and has unique market characteristics that distinguish it from other regions.
Recent reports revealed that the South Korean market is known for its preference for altcoins, which are often more volatile than major digital currencies like Bitcoin and Ethereum.
The report indicates that in the first quarter of 2024, the South Korea Won emerged as the dominant currency for cryptocurrency trades worldwide, surpassing even the US dollar in trade volume.
This surge is reflective of the speculative enthusiasm surrounding digital currency assets in the region, which has been so prominent that, according to Bloomberg, it became a topic of discussion in recent parliamentary elections.
Politicians have also attempted to sway voters by promising more favorable digital currency tax policies and fewer investment restrictions.
Featured image from Unsplash, Chart from TradingView