Crypto.com plans to launch retail trading in South Korea on April 29th in order to replace its previously acquired local exchange OK-BIT’s services. The company faces regulatory hurdles but eyeing South Korea’s active crypto market amidst stiff competition.
Crypto.com, the global digital asset exchange, makes a strategic move into South Korea’s thriving market. The company’s announcement on April 2nd, 2024, reveals plans to launch their retail trading services on April 29th, effectively replacing the offerings previously provided by the acquired local exchange OK-BIT.
“We are incredibly excited to be launching the Crypto.com App for retail users in South Korea – a market of tremendous importance to the growth of our business, and one in which consumers are very interested in crypto,” said Eric Anziani, President and Chief Operating Officer of Crypto.com, highlighting the country’s active crypto community.
Crypto.com also obtained regulatory approval and essential registrations under the Electronic Financial Transaction Act and as a Virtual Asset Service Provider (VASP) in August 2022. The company is committed to operating within the legal framework and adhering to ethical and risk management principles.
Regulatory Hurdles for Crypto.com App
Crypto.com’s Korean platform, named Crypto.com App, faces regulatory hurdles in South Korea, known for its strict regulations. Unlike Crypto.com’s offerings in other regions, the platform will not serve institutional investors due to South Korean regulations prohibiting direct crypto investment by South Korean institutions.
Furthermore, South Korean laws require domestic exchanges to collaborate closely with banking institutions to enable fiat-to-crypto trading, a prudent protect against potential money laundering and market manipulation risks. OK-BIT, lacking such an alliance, provided only crypto-to-crypto trading options.
Crypto.com transparently acknowledges this constraint during its initial launch phase while actively seeking a local banking partner to deliver the comprehensive trading experience, as reported by the South Korean news agency News1.
South Korea’s Competitive Crypto Landscape
South Korea is one of the largest and most active crypto markets. The collective day-to-day trade volume of its five fully licensed platforms, Bithumb, Upbit, Korbit, Coinone, and Gopax, nears $3 billion, according to data from CoinGecko. This considerable volume, observed even during the recent market decline, highlights the opportunity Crypto.com discerns in the area.
Crypto.com’s entry adds another player to the South Korean competitive crypto market. Last year, Binance, a prominent crypto exchange, gained traction by acquiring a controlling stake in Gopax, a domestic exchange grappling with liquidity challenges. Gopax is one of South Korea’s five fully licensed exchanges, permitting fiat-to-crypto transactions.
Despite the acquisition, Binance faced challenges to enter South Korea’s market due to regulatory scrutiny. Local authorities denied approving Gopax’s structural changes, reportedly over Binance’s legal troubles in the U.S. In an effort to reduce these concerns, Binance has been actively pursuing compliance measures, including decreasing its shareholding in Gopax and stepping down as its largest shareholder.
next