Binance’s acquisition of Gopax in South Korea has been delayed by regulators due to the SEC lawsuit.
The SEC has filed a lawsuit against Binance for violating securities law, leading to negative effects on the company’s operations, specifically its acquisition of Gopax in South Korea. According to the SEC’s filing, Binance mishandled investors and misled both investors and regulators. The Commission also accused the exchange of allowing Americans to trade in an unsecured and unprotected environment, breaking the rules. The Director of the SEC’s Division of Enforcement, Gurbir S. Grewal, stated that Binance consciously chose to flout the rules and put its customers and investors at risk to maximize profits. The SEC also alleged that Binance engaged in multiple unregistered offerings.
As a result, the legal case has become a hindrance to Binance’s business opportunity with Gopax. The South Korean Financial Service Committee (FSC) is reviewing the Gopax acquisition by Binance due to the SEC allegations. Binance bought a majority stake in Gopax in February, but the regulator has postponed the report and acceptance of the business change notification filed by Gopax regarding the Binance deal. The FSC finds it difficult to accept the report due to the alleged accusations from the SEC and further requests to seize all assets belonging to the US arm of Binance.
In addition to the SEC accusations, Binance is also under investigation by the US Commodity Futures Trading Commission (CFTC) for violating trading and derivative trading regulations and evading registration obligations. The company also has a case with the US Prosecutors’ Office and the US Internal Revenue Service for breaching anti-money laundering laws.
Although Binance saw the acquisition of Gopax as a means of re-entering South Korea and turning the local trading platform around, the collapse of the FTX crypto exchange in November 2022 caused Gopax to halt withdrawals of principal and interest payments from its DeFi service GoFi. Thus, the Binance deal was supposed to reawaken the troubled exchange.
