The Financial Services Commission (FSC) rejects Gopax’s executive change report and raises concerns over the acquisition requests due to allegations of securities laws violations
The SEC’s lawsuit against Binance poses potential risks to the crypto exchange’s business prospects in South Korea.
According to a report in a South Korean daily, the Financial Service Committee (FSC) is currently reviewing Binance’s acquisition of Gopax, a local crypto trading platform. Binance acquired a majority stake in Gopax earlier this year with the aim of re-entering the South Korean crypto market after a two-year absence.
Reportedly, the Financial Service Committee (FSC) has suspended Gopax’s executive change report filed on March 7 due to the impact of the recent SEC lawsuit against Binance. The report included the nomination of three Binance members, including Leon Singh Poong, CEO of Binance Asia Pacific, as inside directors of Gopax.
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During its review of the Gopax deal, the FSC expressed its difficulty in accepting the acquisition request due to the alleged accusations of securities law violations and the additional requests by the SEC to freeze Binance.US assets. An executive from the FSC stated the importance of considering the SEC lawsuit, further noting that the report is currently under internal review.
The acquisition of Gopax by Binance served not only as a means for the crypto exchange to re-enter the South Korean market but also as an opportunity to revive the struggling local crypto trading platform. Gopax faced challenges when it suspended withdrawals of principal and interest payments from its decentralized finance (DeFi) service, GoFi, in November 2022, following the collapse of the FTX crypto exchange and the bankruptcy of Genesis Global Capital.
Digital Currency Group, the parent company of Genesis, was reportedly Gopax’s second-largest shareholder and a significant business partner, offering its GoFi product. Binance’s acquisition deal aimed to inject fresh capital into the Gopax exchange to facilitate customer withdrawals and interest payments for GoFi.
In the SEC lawsuit against Binance, the crypto exchange was accused of commingling customers’ funds and violating multiple securities laws. The SEC filed a total of 13 charges against both the exchange and its CEO Changpeng Zhao.
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Important:Â This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.
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