(Bloomberg) — Just six days before its planned retail expansion, the crypto exchange Crypto.com postponed its launch in South Korea so it can communicate further with regulators.
Most Read from Bloomberg
“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 firm said in an email statement on Tuesday. “We will postpone our launch and take this opportunity to make sure Korean regulators understand our thorough policies, procedures, systems and controls,” it added.
Read more: Crypto.com Hiring Again as Digital-Asset Employment Revives
South Korea’s Financial Intelligence Unit visited Crypto.com’s local office on Tuesday after finding “concerning matters” in submitted documents related to anti-money laundering, the Korean news organization Segye Ilbo reported. Crypto.com didn’t comment on the report.
Earlier this month Crypto.com announced plans to launch some of its services in Korea on April 29 with its locally acquired platform OkBIT, which was ceasing its services at the end of the month. The company didn’t disclose a new launch date.
“Crypto.com has not onboarded any new customers in Korea since acquiring OkBit,” a Crypto.com spokesperson said, adding that OkBit had around 900 users at time of acquisition and their access has just been limited to withdrawals.
Demand for cryptoassets in the country is so feverish that it became an agenda item in the recent parliamentary elections, with political rivals trying to woo voters by promising to delay digital asset taxes or lift restrictions on investing in US Bitcoin ETFs.
South Korea is an outlier even in the high-risk crypto sector, with local preferences skewed toward smaller, often more volatile tokens — so-called altcoins — over larger cryptocurrencies like Bitcoin and Ether. On average, trades involving smaller tokens make up more than 80% of all activity in South Korea.
The won was the most traded currency against cryptoassets globally in the first quarter of this year, where it accounted for $456 billion in cumulative trade volume on centralized crypto exchanges in the first quarter of 2024, compared with $445 billion in dollar volume, according to data from research firm Kaiko.
Read: Do Kwon, Terraform Labs Found Liable for Fraud in SEC Trial
South Korean regulators have said they’ll roll out tighter user protection rules from in July in response to the $40 billion collapse of TerraUSD, the ill-fated stablecoin created by Do Kwon.
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.