Binance is currently facing challenges in its business endeavours in South Korea due to legal issues with financial regulators in the United States.
The U.S. SEC recently filed a lawsuit against Binance; it accused the crypto exchange of commingling user funds and violating multiple securities regulations. The regulator brought 13 charges against the exchange, its subsidiaries, and its CEO, Changpeng Zhao. Binance is also involved in a separate lawsuit with the U.S. Commodity Futures Trading Commission (CFTC) for allegedly evading registration obligations and violating trading and derivative trading regulations.
These developments have attracted the attention of the Financial Service Committee (FSC), South Korea’s financial watchdog. The FSC is currently investigating Binance’s acquisition of the local cryptocurrency trading platform Gopax.
According to local reports, the South Korean authorities suspended the acceptance of Gopax’s request for a change of registered executives on March 7, 2023, and initiated an investigation into the acquisition. Leon Singh Poong, the CEO of Binance Asia Pacific, was among the three Binance members identified as new directors of Gopax.
Meanwhile, the FSC has expressed difficulties in proceeding with the request at the moment due to alleged securities law violations and the U.S. SEC’s request to freeze Binance.US assets. A representative from the FSC emphasized the importance of considering the SEC’s lawsuit and the potential risks involved.
Binance acquired a majority stake in Gopax in February 2023 with the aim of reentering the South Korean cryptocurrency market after a two-year absence. In addition to reintroducing its cryptocurrency exchange in South Korea, Binance intended to revive the struggling local crypto trading platform.
The collapse of the FTX and the bankruptcy of Genesis, a digital asset financial services provider led to Gopax halting withdrawals of capital and interest payments from its decentralized finance service, GoFi, in November 2022. According to reports, the Digital Currency Group, the parent company of Genesis, held the second-largest stake in Gopax and played a significant role in the platform’s GoFi product.
Binance agreed to inject new capital into the Gopax exchange as part of the acquisition agreement in order to facilitate customer withdrawals and ensure GoFi interest payments. If the acquisition fails, there may be potential complications regarding the withdrawal of GoFi deposit assets.
If you want to read more news articles like this, visit DeFi Planet and follow us on Twitter, LinkedIn, Facebook, Instagram, and CoinMarketCap Community.
“Take control of your crypto portfolio with MARKETS PRO, DeFi Planet’s suite of analytics tools.”
