Crypto.com Faces Regulatory Scrutiny, Postpones App Launch in South Korea

Crypto exchange Crypto.com has decided to postpone its app launch in South Korea after regulators discovered money laundering anomalies in its platform data. The South Korean authorities conducted an "emergency on-site inspection" on April 23 to monitor the exchange's activities after identifying anti-money laundering (AML) concerns in its data.

In August 2022, Crypto.com registered as a Virtual Asset Service Provider in South Korea​ by acquiring local payment services provider PnLink and crypto exchange OK-BIT. Earlier this month, As part of its App launch in the country and in line with regulations, Crypto.com gave 30-days notice to users of its acquired OK-BIT platform that it was ceasing services as of April 29th – when the Crypto.com App would go live.

However, following the latest regulatory action, a spokesperson for the exchange comfirmed that they would postpone the launch which scheduled for April 29, and they would "take this opportunity to make sure Korean regulators understand our thorough policies, procedures, systems and controls."

South Korea has been actively strengthening its regulation of the cryptocurrency industry in recent years. At the beginning of 2023, the country's Ministry of Justice announced that it would soon introduce a cryptocurrency tracking system​, mainly to detect the sources of illegal funds. In the middle of the year, the government issued several regulations, including requiring firms to disclose their cryptocurrency holdings and to maintain a minimum cash reserve of 3 billion won​ (approximately $2.3 million) in their bank accounts as a safeguard.