South Korea Regulator Delays Approval of Leadership Change for Crypto.com’s Local Unit

South Korea’s Financial Intelligence Unit is delaying approval of a change in leadership at the local unit of the popular exchange Crypto.com. The delay is likely to cause problems for Crypto.com as it prepares to fully launch operations in South Korea.

Earlier this month, Crypto.com announced a launch in the South Korean market, planned for April 29. The plan is for Crypto.com to replace OK-BIT, a local crypto exchange Crypto.com acquired back in 2022.

South Korea Yet to Approve Crypto.com Leadership

According to a report from local news platform Bizwatch, Foris DAX Korea Ltd, the operator of OK-BIT, effected a change in leadership on January 25, to Crypto.com President and COO Eric Anziani, from co-founder and CFO Rafael Melo. South Korea’s Specific Financial Information Act requires cryptocurrency businesses to report these changes to the FIU within 30 days. This means Crypto.com likely filed with South Korea’s FIU sometime in February.

The Bizwatch report specifies that as of May 12, Foris DAX’s CEO is still listed as Rafael Melo even though the change should have already been effected. Interestingly, more than one change has been successfully effected by the FIU in the period. The Korbit crypto exchange made changes to its board of directors, now successfully effected by the FIU.

Reportedly, financial authorities are not very supportive of global crypto businesses entering South Korea. This poses a problem for Crypto.com, even if operations eventually continue. Nonetheless, Crypto.com plans to launch as scheduled. However, there may be hiccups by November when Crypto.com is expected to renew OK-BIT’s license.

Unfortunately, Binance is also facing regulatory issues in South Korea. Attempting to enter the local market, Binance purchased a majority stake in Gopax, a local exchange struggling with liquidity issues. Gopax is one of only a few exchanges licensed to offer users fiat-to-crypto services.

Binance  Also Battling Local Authorities

After the Binance acquisition, Gopax applied to make structural changes to its registration with the country’s Financial Services Commission (FSC). However, the Commission has delayed approving the registration change for over a year. Reportedly, authorities are concerned about Binance’s legal problems in the United States.

Binance is now uninterested in moving forward and has entered early-stage discussions to get rid of its majority stake in Gopax. In a January roundtable, Binance’s Asia-Pacific Business Development Director Steve Kim said the plan is to convert Binance loans to Gopax into equity. It will then sell the shares to other firms.

South Korea recently introduced stricter rules for crypto exchanges. With implementation expected in May, the rules include a few restrictions, including limiting the tokens that exchanges can list. Specifically, the law bans exchanges from listing any digital assets associated with exploited or scam projects until after thorough investigations and resolutions. In addition, foreign projects looking to list tokens on South Korean exchanges must publish detailed whitepapers or manuals specifically written for the South Korean audience.

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