Crypto.com’s Expansion in South Korea Amid Regulatory Scrutiny

Crypto.com, a centralized cryptocurrency exchange, is set to launch its cryptocurrency trading app for retail investors in South Korea on April 29. This move is significant for the company’s growth as South Korea is a key market segment. Eric Anziani, the president and CEO of Crypto.com, expressed excitement about collaborating with South Korean regulators to responsibly grow the industry. The new platform will replace OK-BIT, a crypto exchange that Crypto.com acquired in 2022. OK-BIT will cease its services on the day of the app’s launch.

The app will cater exclusively to retail investors in South Korea since institutions have been banned from investing in crypto since 2017. The country’s financial regulators do not recognize cryptocurrencies as financial assets, so institutions are also prohibited from investing in crypto-related exchange-traded funds (ETFs). With the launch in South Korea, Crypto.com aims to expand its global presence, which is already strong in “tier one” jurisdictions like North America, Western Europe, the U.K., and Asia. The company has been working on establishing a foothold in South Korea since 2022 and has acquired registration under the Electronic Financial Transaction Act (EFTA) and Virtual Asset Services provider (VASP).

Despite the expansion plans, crypto exchanges and company executives in South Korea are facing stricter regulations. The country’s Financial Intelligence Unit (FIU) announced measures to tighten regulatory oversight, including the possibility of expelling platforms deemed “unsuitable.” The FIU also intends to broaden the screening procedures in the crypto market and prevent unfit exchanges from entering the economy. The Financial Services Commission (FSC) proposed an amendment in February that would require regulatory approval for new crypto firm executives before they assume their roles.

If accepted, the amendment would mean that new executives cannot begin working until the FSC formally approves their applications. These developments highlight the increasing scrutiny and regulation of the crypto industry in South Korea. Despite these challenges, Crypto.com remains committed to expanding its services in the country and supporting the responsible growth of the industry in collaboration with regulators.