South Korean Regulator Halts Binance’s Acquisition of Gopax
The acquisition of a local crypto platform by Binance, a global cryptocurrency exchange, has been put on hold by the South Korean financial regulator. The decision comes in response to enforcement action taken against Binance by the U.S. Securities and Exchange Commission (SEC).
The Financial Service Committee (FSC) of South Korea halted Binance’s acquisition of a local crypto trading platform called Gopax after the SEC filed a lawsuit against Binance. The lawsuit alleges that Binance offered crypto assets classified as unregistered securities.
In February 2023, Binance acquired a majority stake in Gopax with the aim of re-entering the South Korean crypto market after a two-year absence.
The FSC stopped Gopax’s executive change report, which was filed in March, citing the ongoing SEC lawsuit. The report included the appointment of three Binance executives as inside directors of Gopax, including Leon Singh Poong, the CEO of Binance Asia Pacific.
In its evaluation of the Gopax deal, the FSC expressed difficulty in accepting the acquisition request at this time due to the alleged law breaches and the SEC’s efforts to freeze Binance.US assets.
“It is cautious to say that the report is being reviewed internally,” stated an executive from the Korean regulatory body.
The SEC has charged Binance, its subsidiaries, and its CEO Changpeng Zhao with 13 counts.
Gopax’s Last Hope Lost?
Following the troubles faced by the FTX exchange and the bankruptcy of digital assets financial services firm Genesis, Gopax suspended withdrawals of principal and interest payments from its decentralized finance service called GoFi in November 2022.
Notably, Gopax’s second-largest stakeholder and a significant commercial partner for its GoFi product was the Digital Currency Group (DCG), the parent firm of Genesis.
As part of the acquisition agreement, Binance had committed to providing new funds to Gopax for customer withdrawals and interest payments related to GoFi.
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