Crypto.com Buys South Korean Startups To Compete With Local Giants
Crypto.com recently gained provisional approval to offer services in Singapore and Dubai — now, it’s adding South Korea to the roster
Crypto.com; Source: Shutterstock
key takeaways
- The exchange announced its local acquisitions during Korea Blockchain Week in Seoul
- The buyouts helped Crypto.com gain registration under South Korea’s Electronic Financial Transaction Act
Crypto markets aren’t exactly bullish. Still, exchange platform Crypto.com is eager to expand to South Korea, having just acquired two local firms to get its local offerings off the ground.
The Singapore-headquartered exchange said in a Monday announcement that it acquired South Korean payment service provider PnLink and digital asset exchange OK-Bit.
Both companies hold Electronic Financial Transaction Act and Virtual Asset Service Provider registrations — certifications for customer safety — which means they now transfer to Crypto.com.
Crypto.com appears to consider its entry into South Korea critical. In a statement, Patrick Yoon, general manager of Crypto.com in South Korea, said it’s a “tremendously important market for Crypto.com in advancing blockchain technology.”
Historically, cryptocurrency has been incredibly popular in the country, which, combined with restrictive capital controls, often leads to higher digital asset prices on local exchanges, allowing for lucrative arbitrage.
Crypto.com says it has attracted 50 million users overall. According to Korea Herald, about 15 million people in South Korea hold accounts at crypto exchanges but only about 6 million actively trade.
“We are committed to working with regulators to continue to bring our products and services to market, particularly in countries like South Korea where consumers have shown strong interest and adoption of digital currencies,” said CEO Kris Marszalek.
The announcement didn’t indicate the cost of acquisition or whether the exchange is yet to fulfill other requirements to be able to fully offer services. Blockworks has reached out to learn more.
Crypto.com will have stiff competition in South Korea
Crypto.com is entering South Korea at a sensitive time. Strict reporting requirements enacted last year have stifled competition, leading to consolidation in favor of South Korea’s “big four” platforms Upbit, Bithumb, Coinone and Korbit.
And following crypto market turbulence, South Korean authorities are reportedly weighing new measures to better protect consumers. Implementation of planned taxes in the country was however recently delayed until 2025.
Crypto.com is the world’s ninth-largest crypto exchange by daily volume, processing $316 million in trades over the past 24 hours, per CoinGecko’s normalized volume data, which attempts to filter out wash trading.
CoinGecko doesn’t publish normalized data for South Korea’s largest exchange Upbit, which reports more than $1.8 billion in daily trade volume.
In any case, Crypto.com’s South Korean play comes after an in-principle approval from Singaporean regulators to offer services in the country, in addition to provisional approval from Dubai.
The exchange recently cut 5% of its workforce as cryptocurrency firms slashed costs to deal with headwinds from the market downturn.
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