South Korean regulator delays approving Crypto.com's local unit leadership change: report

Crypto.com has encountered a roadblock in entering the South Korean crypto market, as the local financial regulator is deferring the approval of a local entity's transition of executive leadership, according to a local media report.

The global cryptocurrency exchange announced on April 2 that it is launching a local trading platform in South Korea, which hosts one of the largest crypto markets in the world. The launch, scheduled for April 29, plans to fill in the spot of locally licensed crypto exchange OK-BIT, which is winding down its services. Crypto.com acquired OK-BIT in 2022.

However, South Korea’s Financial Intelligence Unit has delayed approving the entity’s leadership transition, from Crypto.com Co-founder Rafael Melo to President and COO Eric Anziani, according to local news outlet Bizwatch. 

The FIU and Crypto.com did not immediately respond to The Block’s request for further comments.

Foris DAX Korea Limited, the South Korean company that Crypto.com acquired, internally made the leadership change on Jan. 25, the report said. Given that the FIU requires crypto companies to report such changes within 30 days from the date of the event, it is likely that Crypto.com filed the report in February.

The local report said this delay poses difficulties for Crypto.com in future compliance with local standards set for crypto companies.

The operating license acquired by predecessor OK-BIT will expire this coming November, which Crypto.com will need to renew. As OK-BIT did not qualify for launching a fiat-to-crypto platform, Crypto.com would also need to meet stricter local compliance requirements in order to fully operate in the country.

Meanwhile, Crypto.com told the local media outlet that it is proceeding with the launch as planned, and that it is actively communicating with the regulators.

Binance also facing difficulties

Binance, the world’s largest crypto exchange, has also experienced troubles entering the South Korean market. Last year, Binance acquired a majority stake in local exchange Gopax, which had liquidity issues associated with Genesis Global Capital. Gopax is also one of South Korea’s five fully licensed exchanges, meaning it’s allowed to provide fiat-to-crypto services.

South Korean authorities have repeatedly postponed approving the transferral of ownership within Gopax, reportedly under concerns with Binance’s legal issues in the U.S. 

Binance has been seeking to resolve local compliance issues by planning to step down from being Gopax’s largest shareholder. In March, Binance CEO Richard Teng visited South Korea and met financial regulators, local media reported at the time.