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South Korea’s Naver and Kakao Follow Binance Out of Singapore

·2-min read

It’s not only regulatory chatter that’s been on the rise in recent weeks. In spite of the holidays, regulators have been active at the turn of the year.

For crypto investors, the regulatory risk remains a key downside risk. A number of moves against platforms suggest that greater oversight is on the horizon.

What are Naver and Kakao

To put it into perspective, South Korea’s Kakaotalk, more commonly referred to as KaTalk, overshadows the likes of LINE, WhatsApp, and Tiktok at home. KaTalk forms part of Kakao, a South Korean internet company with more than 10,000 employees and reported revenue of KRW4.16tn for FY2020.

Naver is no smaller. Launched in 1999, Naver was the first web portal with its own search engine.

In South Korea, Naver sits ahead of the likes of Google as the search engine of choice. Significantly, Naver also sits behind the globally popular mobile messenger app LINE.

In the world of decentralization, both have embraced blockchain technology, with goals to break down boundaries and expand globally.

Regulatory Landscape

Just last month, Binance withdrew its application to operate as a crypto exchange in Singapore. The withdrawal was reportedly due to falling short of the Monetary Authority of Singapore’s (MAS) AML and KYC requirements.

With regulators globally taking a greater interest in the crypto space at the turn of the year, establishing in Singapore will likely prove to become more challenging, particularly for subsidiaries of foreign entities.

It, therefore, comes as little surprise that Line Tech Plus and Klatyn fell short of MAS expectations. The two entities fall under Naver and Kakao respectively.

Both entities reportedly saw their request to operate as digital payment token service entities denied this week.

To put it into perspective, only 3 entities out of a reported 170 companies have received the MAS stamp of approval. Two are Singapore entities and one is Independent Reserve, an Australian crypto exchange.

Interestingly, the news comes off the back of the South Korean government’s plans to widen its reach on crypto holders ahead of 2023 income tax changes on crypto holdings.

What lies ahead for both Kakao and Naver on the international blockchain stage remains to be seen. Attempts to arbitrage tight restrictions at home may be a tall order, however, as regulators look to unite to address AML and KYC issues and more.

A call by the Bank of England for the need to form a global framework to regulate the crypto market may have found traction…

Crypto Market Reaction

Once more, the crypto market reaction to the latest regulatory news has been muted. While this is the case, however, there’s been no breakout following the turn of the year pullback.

At the time of writing, Bitcoin (BTC) was up by 1.23% to $47,022.

This article was originally posted on FX Empire