South Korean FSC claims it is internally reviewing Binance's request to acquire Gopax.
Binance's expansion into the South Korean market could be in danger following a lawsuit from the United States Securities and Exchange Commission (SEC).
According to a local news portal in South Korea, the nation's financial regulator, the Financial Service Committee (FSC), is looking closely at Binance's desire to purchase the native cryptocurrency trading platform, Gopax.
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In February, Binance secured a controlling interest in Gopax, hoping to regain its foothold in the Korean crypto sector following a two-year pause.
The FSC appears to have put on hold the executive change report submitted by Gopax on March 7th, citing the current SEC legal actions as a significant concern. The report outlined the appointment of three Binance representatives, including Leon Singh Poong, Binance Asia Pacific's CEO, as inside directors at Gopax.
As the FSC scrutinizes the Gopax transaction, it has suggested that given the serious accusations of securities law breaches and additional SEC requests to lock down Binance.US assets, at this stage, the approval of the acquisition is challenging.
An FSC executive underscored the importance of considering the SEC lawsuit, noting:
It is cautious to say that the report is being reviewed internally.
The Binance and Gopax deal wasn't solely about Binance's re-entry into South Korea; it also represented a potential lifeline for the struggling domestic cryptocurrency platform.
In November 2022, Gopax suspended withdrawals of principal and interest payments from its GoFi decentralized finance service in the aftermath of the crypto exchange's FTX collapse and the bankruptcy of Genesis, a digital assets financial services firm.
Digital Currency Group, Genesis' parent company, was a critical business partner for Gopax, providing its GoFi product, and was also Gopax's second-largest shareholder. The acquisition agreement with Binance offered an influx of new funds to Gopax, facilitating customer withdrawals and interest payments for GoFi.
