Crypto.com denies reports that South Korean regulator is delaying local unit leadership change

Crypto.com has denied a local media report that said the firm might have encountered a roadblock in entering the South Korean crypto market, as the local financial regulator could be deferring the approval of a local entity's transition of executive leadership.

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.

Local news outlet Bizwatch reported, citing industry sources, that South Korea’s Financial Intelligence Unit delayed approving the entity’s leadership transition, from Crypto.com Co-founder Rafael Melo to President and COO Eric Anziani.

"We are working to update some of our directors of our local entity, as a procedural formality, and this has no impact on our ability to launch our app in South Korea on 29th April," a Crypto.com spokesperson said.

The FIU did not immediately respond to The Block’s request for further comment.

Foris DAX Korea Limited, the South Korean company that Crypto.com acquired, internally made the leadership change on Jan. 25, the local media 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 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.

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.

Update: Added comment from Crypto.com and updated throughout for clarification.