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- Binance’s Gopax acquisition approval expected by end of 2025.
- South Korea’s FIU reviews key executive changes for Binance deal.
- Gopax crisis leads Binance to acquire majority stake in 2023.
South Korean authorities have resumed reviewing Binance’s acquisition of the local crypto exchange, Gopax, after over two years. This implies that Binance, the world’s largest cryptocurrency exchange, can re-enter the South Korean market in the near future. The company had previously been shut down in 2021.
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FIU Evaluates Executive Changes for Binance’s Stake in Gopax
A formal report made by Gopax on the shift in key executives is under review by the Financial Intelligence Unit (FIU) of South Korea. This review is a prerequisite for green-lighting Binance’s stake in Gopax. This might be approved by the end of 2025. South Korea lacks a specific suitability test on key cryptocurrency exchange shareholders. Consequently, this analysis will focus on Binance’s position as the largest shareholder.
The executive change report was submitted by Binance in March 2023, following its acquisition of a 67% stake in Gopax. The approval process, however, collapsed due to an issue related to anti-money laundering (AML). These fears intensified in June 2023, when the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Binance. The SEC accused Binance of conducting activities in the U.S. without authorization. The U.S. Department of Justice also accused the company of money laundering offenses. This resulted in penalties of 4.3 billion being paid by Binance.
Nonetheless, despite these difficulties, the restart of the review is an indication that the compliance problems may have been overcome. This paves the way towards the acquisition of Binance by the FIU.
Gopax Faces Setbacks Amid Binance’s Acquisition Efforts
One of the five licensed crypto exchanges in South Korea, Gopax, has found itself in a severe crisis in 2023. Its DeFi partner, Genesis Global Capital (GGC), blocked withdrawals and went into bankruptcy. The death of FTX brought this about. It has frozen the customer funds amounting to approximately $47 million.
In early 2023, Binance bought the majority of Gopax. This was aimed at injecting capital to solve the crisis for the concerned users. First, Binance was intending to sell part of its shares in Gopax to Megazone, a local cloud provider. This would have diluted Binance to make Megazone the second-largest shareholder. Nevertheless, the transaction collapsed at the end of 2024. Consequently, Binance remains the largest shareholder in Gopax.
As the review will show, Binance is poised to re-enter the South Korean cryptocurrency market. This could have far-reaching consequences for the market environment if approved.
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