The takeover of the cryptocurrency exchange GOPAX, which Binance plans to buy to open up to the South Korean market, has been disrupted for the second time due to the SEC lawsuit.
South Korea points to litigation between Binance and SEC
cryptocoin.com As you follow, Binance took action earlier this year to acquire a local exchange, GOPAX, to open up to the South Korean market. The acquisition was blocked first by the bank failures of 2023 and then by the crisis that spread to crypto companies like Genesis.
The ongoing takeover process was officially halted today by South Korea’s decision. The country’s financial watchdog said it was very difficult to accept purchase requests amid accusations of violating securities laws. South Korea is now delaying Binance’s purchase of Gopax for the second time.
South Korean regulator delays Gopax acquisition due to Binance-SEC lawsuit https://t.co/UHDtoiDWjJ
— The Block (@TheBlock__) June 7, 2023
A report in a South Korean newspaper suggests that the Financial Services Committee (FSC), the country’s financial watchdog, is reviewing Binance’s acquisition of local exchange Gopax. Binance was intent on re-entering the South Korean crypto market after a two-year hiatus. For this, he bought the majority stake in Gopax in February.
Citing the recent SEC lawsuit, the FSC suspended Gopax’s executive change report, which it submitted on March 7.
Purchase has impact on some Gopax customers
The exchange’s ‘Gopay’ product was heavily indebted after the collapse of FTX. Binance said it plans to close this gap. Gopax shared details on what would happen if the US government seized Binance’s assets. He claimed that in such a case the funds used for Gopay would not be activated.
According to a spokesperson, “Binance has bases in many places. We understand that funds for Gopay repayments come from an Ireland-based holding company. The funds are not exclusively from Binance, which is owned by a holding company in the UK. A charity industry fund created by governments but with contributions from partners and early investors.
Gopax acquisition was part of Binance’s revival plan
Binance’s acquisition of Gopax is not just about its re-entry into South Korea. The exchange also aims to revive the troubled native crypto platform. In November 2022, Gopax was in trouble due to the collapse of the FTX crypto exchange. Then, it took the second hit with Genesis’ bankruptcy. The South Korean exchange later stopped withdrawing principal and interest payments from its DeFi service GoFi.
Genesis’ parent company, Digital Currency Group, was Gopax’s second largest shareholder. It was also among the key business partners providing the GoFi product. Binance’s buyout deal promised to give customers back their funds stuck on the platforms. Binance has also pledged to pour new capital into the Gopax exchange for GoFi’s interest payments.
Binance is now again delaying all its promises for aggrieved Gopax users. Earlier this week, the US regulator SEC accused Binance of embezzling client funds with exchange funds. The SEC filed 13 charges against the exchange, its subsidiaries, and its CEO, Changpeng Zhao.
