Crypto.com Continues to Increase Its Presence in South Korea Despite Regulatory Hurdles
Crypto.com, one of the largest cryptocurrency exchanges in the world, recently expanded its operations in South Korea. As per a new Cointelegraph article, the firm noted that it has been working on expansion in the Asian nation for years.
Crypto.com a centralized and regulated trading platform is to launch its trading application for South Korean investors on 29th April. The firm will list 150 cryptocurrencies and NFTs.
Crypto.com Expansion Plan
Eric Anziani, CEO and President told media on 2nd April that the initial digital asset portfolio at the platform in South Korea is part of the expansion plan.
He claimed that regulatory agencies are paving the way for digital asset exchanges and look forward to collaborate with these firms as a way to expand the industry in a responsible manner. The new wing of Crypto.com in the region is going to take over the market share of OK-Bit.
Crypto.com acquired OK-Bit in 2022 such that the platform will halt its services on the same day as the launch of the application on 29th April. The new app will grant retail cryptocurrency investors in South Korea to various digital currencies and NFTs.
However, it is worth mentioning that commercial investments in the crypto sector have been banned in the region since 2017. Local regulators are yet to recognize cryptocurrencies as financial assets.
South Korean Regulators Restrict Institutions from Investing in Crypto ETFs
Regulators in South Korea have not classified cryptocurrencies as digital assets to date. On this account, the financial institutions operating in the country are barred from investing or launching any crypto-backed ETFs.
Crypto.com management has retained that its South Korean launch is part of its global expansion plan. Crypto.com has maintained a strong presence in jurisdictions such as North America, the United Kingdom, Western Europe, and Asia.
The platform has been working on boosting its operational capabilities in South Korea since 2022, after securing the Virtual Asset Services Provider license. The certification was awarded after the regulators passed the Electronic Financial Transaction Act in the same year. Crypto.com app is set to launch in the ongoing month regardless of regulatory constraints in the country.
South Korean regulators have taken a stringent stance towards cryptocurrency exchanges and their executives in the nation. The Financial Intelligence Unit (FIU) recently announced tightening regulatory measures for crypto platforms in the region with plans to expel unsuitable platforms as mentioned in a February report.
FIU shared a plan to expand the scope of screening procedures in the crypto sector and prevent unfit exchanges from offering services.
South Korea’s FSC to Amend Crypto Regulations
The Financial Services Commission (FSC) of South Korea introduced a new regulatory amendment in February. This amendment will require the executives to obtain regulatory approval before working in an executive capacity.
The amendment is in the process of voting for approval. If approved all cryptocurrency firms will require FSC approval before hiring new executives to the management.
Political parties in South Korea have pledged to introduce crypto-based incentives as a way to expand their vote banks before the next parliamentary elections. A Cointelegraph article reported that political parties in South Korea have promised crypto-based incentives as a way to gain more popularity among prospective voters.
A Bloomberg report on the matter indicates that the Democratic Party promised voters to remove restrictions on local and foreign ETFs.
Additionally, the party also plans to make US-based spot Bitcoin ETFs more accessible for investors in the region. However, the security regulators of the country have warned that local distribution of foreign ETFs can violate domestic laws. Hwanseok Choi hailing from the Democratic Party noted that the party leadership intends to make ETF legal on a local and international scale.
Meanwhile, President Yoon Suk Yeol of the People’s Power Party has pledged to delay taxes on digital asset trading that are set to become effective in 2025. As per local government statistics, around 6 million investors hailing from South Korea hold or trade cryptocurrencies as of 2023. The number accounts for 10% of the total population of the region.
