Crypto.com is currently undergoing an urgent on-site inspection by South Korean financial authorities concerning potential money laundering activities, as reported by local news outlet Segye. The Financial Intelligence Unit (FIU) initiated this inspection on April 23rd, only six days before Crypto.com’s planned launch of its domestic service in South Korea.
Here are the key points:
- Crypto.com acquired the domestic exchange OKBit in June 2022 and obtained a domestic virtual asset business license (VASP) in South Korea.
- The exchange had previously announced plans to introduce a domestic mobile app on April 29th.
- Concerns related to anti-money laundering were discovered by the FIU in the data submitted by Crypto.com.
- The ongoing inspection may impact Crypto.com’s scheduled domestic service launch on April 29th.
An official from the financial authorities mentioned, “We found concerns regarding the prevention of money laundering in the submitted data,” which prompted the urgent on-site inspection. This development is crucial for Crypto.com as it prepares to enter the South Korean market.
During a press briefing on April 2nd, Crypto.com had announced its strategy to differentiate itself from domestic exchanges by offering competitive prices without the “kimchi premium.” However, the ongoing inspection has raised doubts about the exchange’s ability to launch its domestic service as planned.
In response, Crypto.com emphasized its commitment to maintaining high anti-money laundering (AML) standards. The exchange stated that it would postpone its launch to ensure Korean regulators understand its comprehensive policies, procedures, systems, and controls, which have been reviewed and approved by major jurisdictions globally.
A representative for Crypto.com acknowledged South Korea as a challenging market for global exchanges to penetrate but reiterated the company’s dedication to collaborating with regulators to responsibly advance the industry for Korean users.
The outcome of the FIU’s inspection could significantly impact Crypto.com’s prospects in the South Korean market.
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