TLDR
- Binance’s acquisition of Gopax could soon receive approval by the end of 2025.
- South Korea’s FIU resumes reviewing Binance’s Gopax acquisition after two years.
- Binance remains Gopax’s largest shareholder despite previous efforts to reduce its stake.
- Legal settlements in the U.S. may have paved the way for Binance’s re-entry into South Korea.
Binance, the world’s largest cryptocurrency exchange, is edging closer to a potential re-entry into South Korea’s market. The country’s Financial Intelligence Unit (FIU) has reopened its review of Binance’s acquisition of the local crypto exchange Gopax, which had been on hold for over two years. This move signals that Binance may soon resume its operations in South Korea, following its intervention to assist Gopax during a financial crisis in 2023.
FIU Reassesses Binance-Gopax Deal
South Korea’s Financial Intelligence Unit (FIU) has resumed reviewing Binance’s acquisition of Gopax, a local cryptocurrency exchange, after a two-year delay. The review is based on a report from Gopax that outlines changes to its key executives.
This is seen as a reassessment of Binance’s qualification as a major shareholder under the country’s current regulations. According to reports, the FIU is reviewing the proposal favorably, with approval expected by the end of 2025.
The acquisition deal was initially stalled due to concerns over anti-money laundering risks, particularly following Binance’s legal troubles in the U.S. In June 2023, Binance faced legal challenges from the U.S. Securities and Exchange Commission (SEC) and the Department of Justice, resulting in a $4.3 billion settlement for money laundering violations. These issues led to local authorities postponing the approval of Binance’s stake in Gopax.
Gopax’s Financial Crisis and Binance’s Intervention
Binance stepped in to assist Gopax in early 2023 after the exchange faced a significant withdrawal crisis. The issue began when Genesis Global Capital (GGC), a decentralized finance (DeFi) partner of Gopax, froze approximately $47 million of customer funds due to GGC’s bankruptcy. The bankruptcy followed the collapse of FTX, which sent shockwaves throughout the cryptocurrency industry.
In February 2023, Binance acquired a majority stake in Gopax, purchasing 67% of its shares. This move aimed to help Gopax repay users affected by the frozen funds. However, despite initially attempting to reduce its ownership by selling part of its stake, Binance remains Gopax’s largest shareholder. The local authorities’ review of the acquisition has been a key hurdle in finalizing the deal, which has now been re-opened by the FIU.
Regulatory Concerns and Delayed Approval
Binance’s entry into the South Korean market has been delayed due to regulatory concerns. South Korea’s legal framework requires strict anti-money laundering (AML) compliance for cryptocurrency exchanges, especially those operating as major shareholders. The review of Binance’s acquisition is essentially a process to evaluate whether Binance meets these stringent qualifications.
Despite these concerns, Binance’s legal settlements in the U.S. appear to have had a positive effect on its standing in South Korea. The FIU’s reopening of the review suggests that the compliance issues faced by Binance in the U.S. are no longer seen as a major obstacle. This shift could signal a change in attitude towards Binance’s operations in South Korea, with approval for the deal potentially coming soon.
Future of Binance in South Korea
The review’s outcome could pave the way for Binance’s return to South Korea, a market it exited in 2021 due to regulatory pressures. If the acquisition of Gopax is approved, Binance could once again offer its services in South Korea, a significant market for cryptocurrency exchanges in Asia.
However, the approval is not guaranteed. South Korean regulators are known for their strict stance on cryptocurrency exchanges, and Binance’s global legal battles could still affect the final decision. Despite this, the reopening of the review process signals optimism that Binance may soon resume its presence in the South Korean market, with Gopax serving as its local partner.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
