Singaporean cryptocurrency exchange, Crypto.com, announced it would delay the rollout of its services in South Korea following regulatory discoveries of suspicious money laundering activities in their platform’s data.
South Korean regulatory officials discovered issues concerning Anti-Money Laundering regulations in the information provided by Crypto.com. In response, these authorities conducted an unexpected on-site investigation to closely scrutinize the crypto exchange’s operations. An FSC representative spoke with Segye Ilbo about the situation.
“We found concerns related to the prevention of money laundering activities in the submitted materials.”
On April 23, the Financial Intelligence Unit (FIU) based in South Korea’s Financial Services Commission unexpectedly conducted an on-site investigation, only six days prior to the scheduled launch of the exchange in the region.
Previously, Crypto.com secured a local virtual asset business license (VASP) in South Korea following the acquisition of a homegrown crypto exchange, OKBit.
The company subsequently announced that it would postpone the scheduled launch, originally slated for April 29, and collaborate with regulatory bodies to detail 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.”
The Crypto.com representative announced that we would delay our upcoming release. This extra time allows us to clarify our comprehensive policies, procedures, systems, and control measures to the Korean regulatory authorities.
South Korean financial regulators are planning to bar digital assets that have experienced hacks from being listed on local exchanges until the causes of these security breaches have been fully investigated, according to upcoming regulations.
New regulations coming up will ask that foreign digital assets provide a white paper or technical guide for the South Korean market prior to listing. Yet, tokens already listed on approved exchanges for more than two years are exempt from this new requirement.
Starting in late 2023, the Financial Supervisory Service has been developing rules for token listings, collecting input from organizations like the Digital Asset Exchange Association. Token issuers who don’t provide necessary information will risk being removed from exchanges.
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2024-04-23 14:57