A promotional image announcing Crypto.com's launch in Korea / Courtesy of Crypto.com

Crypto.com's entry into the Korean market has been delayed indefinitely due to regulatory issues.

On Tuesday evening, the global cryptocurrency exchange announced that it was delaying its launch in Korea, which had initially been scheduled for April 29.

The announcement followed the launch of an emergency on-site inspection by the Financial Intelligence Unit (FIU) on Crypto.com on the same day.

The FIU, an agency responsible for monitoring unlawful financial activities under the Financial Services Commission, reported identifying suspicious elements in Crypto.com's anti-money laundering practices. It explained that certain aspects of the documents submitted by the exchange necessitated on-site verification.

Crypto.com was slated to officially launch its app in Korea next week, ultimately aiming to enter the Korean won-based trading market in the future. For preparation, it acquired 100 percent ownership of domestic exchange OKBit in 2022. Earlier this month, Crypto.com President Eric Anziani personally announced the plan at a press conference in Korea.

In response to money-laundering concerns, Crypto.com vowed to detail its comprehensive policies, procedures, systems and regulations to the financial authorities.

"Crypto.com operates according to the industry's highest standards for money laundering prevention," the exchange stated. "Although entering the Korean market is challenging for a global crypto exchange, our firm will continue to responsibly develop the industry in collaboration with Korean regulatory authorities."

This isn't the first instance of financial authorities effectively blocking a the establishment of a foreign virtual asset exchange in Korea. Binance, the world's largest cryptocurrency exchange, attempted to enter the Korean market by acquiring a stake in GOPAX last January. However, the FIU has been withholding its approval, citing legal risks associated with Binance's management.

"The FIU has maintained a very strict stance on the money laundering risks associated with exchanges. It seems unlikely it will easily allow foreign exchanges to enter the market," an industry official said.