Crypto.com Faces Money Laundering Inspection, Delay South Korean Launch

The Crypto.com exchange is facing an urgent on-site inspection by South Korean financial authorities regarding potential money laundering activities.

According to a report by local news outlet Segye, the Financial Intelligence Unit (FIU) initiated the inspection on April 23rd, just six days before the planned launch of Crypto.com’s domestic service in the country.

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 previously revealed plans to introduce a domestic mobile app on April 29th.
• The FIU discovered concerns related to anti-money laundering in the data submitted by Crypto.com.
• The ongoing inspection may affect Crypto.com’s domestic service launch on April 29th.

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An official from the financial authorities stated, “We found concerns regarding the prevention of money laundering in the submitted data.” The discovery of these issues led to an urgent on-site inspection, which comes at a critical time for Crypto.com as it prepares to enter the South Korean market.

During a press briefing on April 2nd, Crypto.com announced its strategy to differentiate itself from domestic exchanges by offering reasonable prices without the “kimchi premium.” However, the ongoing inspection has raised questions about the exchange’s ability to launch its domestic service as planned on April 29th.

Crypto.com emphasized its commitment to maintaining AML standards

In a statement shared with CoinDesk, Crypto.com emphasized its commitment to maintaining the highest anti-money laundering (AML) standards in the industry. The exchange stated, “We will postpone our launch and take this opportunity to make sure Korean regulators understand our thorough policies, procedures, systems and controls, which have been reviewed and approved by major jurisdictions around the world.”

A representative for Crypto.com added that South Korea is a difficult market for global exchanges to get into. However, the company remains committed to working with regulators to responsibly advance the industry for Korean users. 

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The outcome of the FIU’s inspection could have significant implications for Crypto.com’s future in the South Korean market.