Binance is finally making progress with its South Korea re-entry after over two years of delay, as authorities have reopened their review of the exchange’s long-stalled takeover of local crypto exchange Gopax.
Summary
- South Korea’s Financial Intelligence Unit has resumed reviewing Gopax’s executive change filing, a key step toward Binance’s re-entry in the country.
- The review was delayed due to concerns over Binance’s legal troubles in the U.S.
- Binance acquired a majority stake in Gopax back in 2023.
Local media reports on Oct. 14 claim that South Korea’s Financial Intelligence Unit has resumed its review of Gopax’s executive change filing, which effectively serves as a proxy review of Binance’s qualification as a major shareholder. Agency officials are said to be assessing the report favourably, and approval may be granted by the end of 2025.
At present, South Korea does not have a separate legal framework for reviewing the eligibility of major shareholders in virtual asset exchanges. Instead, regulators rely on executive change reports to evaluate the suitability of key stakeholders.
Binance first submitted the change report alongside Gopax back in March 2023, less than a month after acquiring a 67% stake, which effectively made it the exchange’s largest shareholder.
However, at the time, regulators stalled the review process and thereby dashed Binace’s hopes of entry in South Korea, over concerns that the exchange could pose risks to the country’s anti-money laundering framework, especially in light of the exchange’s ongoing legal troubles in the United States.
The United States Securities and Exchange Commission, which was led by former chairman Gary Gensler at the time, alongside the Commodity Futures Trading Commission, had accused Binance of offering unregistered securities and failing to implement adequate controls over customer assets.
Separately, the Department of Justice and the Treasury Department charged the exchange for 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 those concerns now settled, and a crypto-friendly administration led by President Lee Jae-myung in power, South Korean regulators have started taking a more open stance toward digital asset regulation, which seems to have influenced the FIU’s latest move.
Binance’s acquisition of Gopax
Binance acquired Gopax in 2023 after the exchange faced a severe liquidity crunch 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 in the aftermath of the FTX fallout due to its deep involvement with FTX and its sister company, Alameda Research.
Millions of customer funds were left stranded during the crisis, which prompted Binance to step in with plans to inject capital and restore withdrawals as part of its industry recovery initiative. For Binance, it was also a move that would help it rebuild trust in regional markets and re-establish its presence in South Korea after it had left the country in 2021.
Gopax is one of the five cryptocurrency exchanges in South Korea that is currently permitted to offer cash-to-crypto services in compliance with local regulations. South Korean law requires crypto exchanges to enact a rigorous due diligence process, and so far, no foreign exchange has been granted this license.
