Binance’s SEC lawsuit delays Gopax acquisition in South Korea.
The United States Securities and Exchange Commission (SEC) has filed a lawsuit against Binance, which could negatively impact the cryptocurrency exchange’s business opportunities in South Korea. A report published in a South Korean newspaper suggests that the Financial Service Committee (FSC), the country’s financial watchdog, is reviewing Binance’s acquisition of the local cryptocurrency trading platform, Gopax. Binance acquired a majority stake in Gopax in February, with the intention of re-entering the South Korean crypto market after a two-year hiatus.
The FSC has reportedly suspended Gopax’s executive change report, which was filed on March 7, citing the recent SEC lawsuit. The report detailed the nomination of three Binance members as inside directors of Gopax, including Leon Singh Poong, the CEO of Binance Asia Pacific. The FSC has claimed that it is very difficult to accept the acquisition request at this point, given the alleged accusations of securities law violations and further requests from the SEC to freeze Binance.US assets. One of the FSC executives said that it is important to consider the SEC’s lawsuit, adding:
“It is cautious to say that the report is being reviewed internally.”
Binance’s acquisition of Gopax was not only about the crypto exchange’s re-entry into South Korea, but also a revival of the troubled local crypto trading platform. In November 2022, Gopax halted withdrawals of principal and interest payments from its decentralized finance service, GoFi, after the collapse of the FTX crypto exchange and the bankruptcy of digital assets financial services firm, Genesis.
- Bitcoin unaffected by SEC lawsuit against blockchain and Binance.
- SEC seeks to freeze Binance US assets.
- Binance.US probe began in 2020, per court documents.
Genesis’ parent company, the Digital Currency Group, was reportedly Gopax’s second-largest shareholder and a key business partner providing its GoFi product. The acquisition deal by Binance promised to funnel new capital into the Gopax exchange for customer withdrawals and interest payments for GoFi.
The SEC lawsuit against Binance accused the crypto exchange of commingling customers’ funds and violating various securities laws. The SEC has filed 13 charges against the exchange, its subsidiaries, and its CEO, Changpeng Zhao.