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By Lee Min-hyung
Crypto.com, a Singapore-based crypto exchange, is making stable gains in the Korean market but Binance, a global crypto exchange platform, is stuck at a crossroads amid prolonged regulatory challenges.
The former is the world's 14th-largest exchange in terms of trading volume. Last year, the company took over OK-BIT, a small exchange in Seoul, in a strategic move to launch its Korean subsidiary. Crypto.com has since faced little difficulty in receiving regulatory approvals from local watchdogs. The company is in the final stage ahead of the official launch of its Korean affiliate ― Crpyto.com Korea ― possibly sometime before the end of the year.
But investors raised questions over why Korean authorities are not allowing Binance, the unmatched leader among global crypto exchanges, to operate here. Binance also took a similar step earlier this year through the acquisition of GOPAX, a more locally influential exchange than OK-BIT.
The Financial Intelligence Unit, the competent authority granting virtual asset service provider (VASP) licenses, however, appears to take an unwaveringly negative stance to Binance, delaying legal procedures without giving the exchange the license to do business here. It normally takes a month and a half for the authority to make a decision on whether to grant the VASP license to crypto business operators.
| Corporate logos of Crypto.com and Binance / Courtesy of each firm |
Industry sources said the contradictory step clearly shows Korean authorities' negative views on the inflow of Chinese capital, as Crypto.com has won the license.
“The outlook for Crypto.com's timely business operation here is bright in that the company has faced little regulatory hurdles,” an industry official said. “This is in contrast to the situation of Binance. The industry expects the world's largest crypto exchange to continue facing regulatory obstacles due to what appears to be a biased stance from the local watchdog, as this was not the case for Crypto.com.”
Patrick Yoon, general manager of Crypto.com's Korean subsidiary, took office in September 2021. He is known to have stood at the forefront of the firm's years-long efforts to do business here. Yoon is a financial expert with around two decades of experience in major global investment banks and financial firms ― such as Morgan Stanley, Standard Chartered Bank and Visa.
While Yoon has been spearheading the preparation for its inroads here for more than a couple of years, Binance carried out a drastic reshuffle of top management after acquiring GOPAX, the fifth-largest crypto exchange here, in early February. Binance changed the leaders at GOPAX three times this year alone, in an apparent move to seek earlier approval from the local authority. But all of the attempts have so far failed to generate a tangible outcome.
“Most industry officials here share a pessimistic outlook on Binance's timely inroads into the Korean market,” another source from a local crypto exchange said. “The frequent reshuffle of top management may not be an answer for its expansion into Korea. But the specific reasons behind such moves remain unclear, as authorities and Binance remain quiet over sharing further details.”