Binance is finally moving forward with its re-entry into South Korea after more than two years of delay, as authorities reopened their review of the exchange’s takeover of long-stalled local crypto exchange Gopax.
Summary
- South Korea’s Financial Intelligence Unit has resumed review of Gopax’s leadership change case, a key step toward Binance’s return to the country.
- The review was delayed due to concerns over Binance’s legal issues in the United States.
- Binance acquired a majority stake in Gopax in 2023.
Local media on October 14 claim that South Korea’s Financial Intelligence Unit has resumed its review of Gopax’s leadership change filing, which effectively serves as a proxy review of Binance’s qualification as a major shareholder. Agency officials would favorably evaluate the report and approval could be granted by the end of 2025.
Currently, South Korea does not have a separate legal framework to review the eligibility of major shareholders for virtual asset trading. Instead, regulators rely on management change reporting to assess the suitability of key stakeholders.
Binance first submitted the change report alongside Gopax in March 2023, less than a month after acquiring a 67% stake, effectively making it the exchange’s largest shareholder.
However, at the time, regulators blocked the review process and thus dashed Binace’s hopes of entry into South Korea, due to concerns that the exchange posed risks to the country’s anti-money laundering framework, particularly in light of the exchange’s ongoing legal issues in the United States.
The United States Securities and Exchange Commission, led at the time by former Chairman Gary Gensler, alongside the Commodity Futures Trading Commission, had accused Binance of offering unregistered securities and failing to implement adequate controls over customer assets.
Separately, the Justice Department and Treasury Department accused the exchange of violating anti-money laundering laws, resulting in a multibillion-dollar settlement in late 2023 that also led to the resignation of Binance founder Changpeng Zhao as chief executive.
With these concerns now addressed and a crypto-friendly administration led by President Lee Jae-myung in power, South Korean regulators have begun to take a more open stance towards the regulation of digital assets, which appears to have influenced the FIU’s latest decision.
Acquisition of Gopax by Binance
Binance acquired Gopax in 2023 after the exchange faced a severe liquidity crisis when its DeFi partner Genesis Global Capital had to freeze customer assets locked in Gopax’s GoFi deposit product.
GGC had to file for Chapter 11 bankruptcy in January 2023 following the FTX fallout due to its deep involvement in FTX and its sister company, Alameda Research.
Millions of customer funds remained stranded during the crisis, prompting Binance to step in with plans to inject capital and restore withdrawals as part of its industry recovery initiative. For Binance, this is also a move that would help it restore confidence in regional markets and reestablish its presence in South Korea after leaving the country in 2021.
Gopax is one of five cryptocurrency exchanges in South Korea currently licensed to offer cash-to-crypto services in accordance with local regulations. South Korean law requires crypto exchanges to implement a rigorous due diligence process, and so far no foreign exchange has obtained this license.
