Authorities in South Korean have again commenced their ongoing review of Binance‘s planned acquisition of local digital currency exchange Gopax following a delay of more than two years. This, according to an update from Newsis. The move suggests that Binance, which remains the largest digital assets exchange globally and is now again focused on Asian expansion with a recent announcement in Japan, might soon re-establish operations in the fast-growing South Korean crypto market, after having previously closed down business operations back in 2021.
As reported by local sources, South Korea’s Financial Intelligence Unit (FIU) is assessing the report from Gopax on changing its executive team and is said to be evaluating it in a more favorable manner, with the anticipated approval of the Binance-Gopax change by year-end.
As part of the existing Korean legal framework and regulatory guidelines, there is no specific suitability requirement for large stakeholders of virtual currency exchange platforms. Therefore, this executive shuffle may be considered a review of crypto exchange Binance’s largest shareholder qualification.
Binance and Gopax had shared the executive change update a couple years back, once Binance had officially been named the largest shareholder of Gopax. In March of 2023, it was reported that Binance had acquired two-thirds or 67% of its outstanding company shares. But local authorities had not fully approved the transaction at that time, due to AML potential risks.
The US Securities and Exchange Commission (SEC) has also filed a lawsuit against Binance back in June 2024 for allegedly offering its crypto services in the United States. And the Department of Justice (DOJ) had alleged that the digital assets exchange had committed money laundering violations, leading to Binance paying a hefty $4.3 billion in fines.
Now, South Korean FIU‘s announcement seems to be motivated by the final resolution of those compliance shortcomings in the United States, local sources claim.
It’s worth noting that Gopax is one of a few Korean crypto exchanges that is actually authorized to process cash-to-crypto transfers, a capability given strictly to those platforms and service providers that satisfy relevant know-your-customer (KYC) and applicable AML guidelines.
Previously, it was reported that Gopax had encountered a major withdrawal issue back in 2023. This was at the time when Genesis Global Capital had proceeded to froze user funds that were said to be linked to Gopax’s GoFi deposit solution.
This had resulted GGC suspending withdrawals and then filing for Chapter 11 bankruptcy in January of 2023. Notably, this had come after the spectacular demise of FTX. Due to these issues, around $47 million in GoFi user funds became inaccessible.
Responding to this serious issue, Binance had in February of 2024 announced it would be acquiring a majority stake in Gopax with the aim of providing the financial resources needed to pay back the impacted GoFi clients.
And when the acquisition had been delayed, Binance attempted to dispose a substantial amount of its Gopax shares to Megazone. This transaction would have made it the second-largest shareholder. But this was not finalized, and now implies that Binance could still be Gopax’s largest shareholder.
