<p>Crypto.com, one of the world&#39;s largest cryptocurrency exchanges, has indefinitely delayed its service launch in South Korea after the country&#39;s financial regulators conducted an on-site inspection on the exchange. The inspection came after the country’s Financial Intelligence Unit (FIU) under the Financial Services Commission detected data that appeared to violate anti-money laundering (AML) compliance requirements from the documents submitted by Crypto.com, according to local media Segye Ilbo. This decision came just six days ahead of its planned launch, originally scheduled for April 29.</p><p>The exchange has secured a virtual asset service provider (VASP) license by acquiring the local trading platform called OkBit in June 2022. A VASP license allows a digital asset exchange to operate in Korea.</p><h3 id="mitigating-kimchi-premium-effect">Mitigating ‘Kimchi Premium’ effect</h3><p>Crypto.com initially planned to launch a mobile app featuring cryptocurrency trading on April 29, targeting South Korean retail investors. The platform aimed to differentiate itself from other local competitors by offering crypto assets at reasonable prices, mitigating the so-called Kimchi Premium effect, as announced in a press conference on April 2. The Kimchi premium refers to relatively high crypto prices in the Korean market compared to other foreign markets, which is prevalent in Korea’s major licensed crypto exchanges.</p><p>The effect often results in Korean investors buying crypto assets at higher prices than those on other global crypto exchanges such as Binance. This is likely where the concerns for AML violation come up, financial experts assume, as the platform’s strategy could facilitate arbitrage during operation.</p><h3 id="crypto-com-remains-committed-to-korea-launch">Crypto.com remains committed to Korea launch</h3><p>In a statement sent to CoinDesk, a spokesperson of Crypto.com said, “Crypto.com maintains the highest Anti-money Laundering standards in the industry. We will postpone our launch and take this opportunity to make sure Korean regulators understand our thorough policies, procedures, systems and controls, which have been reviewed and approved by major jurisdictions around the world.”</p><p>The person also mentioned that South Korea is a difficult market for global crypto exchanges to enter, but still emphasized the company’s commitment to cooperating with local regulators.</p><p>“OkBit maintained approximately 900 customers at the point of acquisition by Crypto.com, and OkBit has never been cited for any AML infractions. Since the acquisition, existing OkBit customer access has been limited to withdrawals,” the spokesperson said.</p>

Crypto.com indefinitely delays South Korea launch following on-site inspections

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