Binance’s Gopax Acquisition Delayed in South Korea Pending SEC Suit

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Binance’s Gopax Acquisition Delayed in South Korea Pending SEC Suit
  • South Korea’s FSC is closely monitoring the lawsuit against Binance.
  • The regulator has consequently delayed accepting Binance’s acquisition of Gopax.
  • Binance faces legal challenges from the U.S. SEC and CFTC.

According to a local report, the Financial Services Commission (FSC) of South Korea has decided to closely monitor the SEC’s ongoing lawsuit against Binance, delaying the acceptance of the report of business change submitted by the exchange as part of its acquisition of Gopax.

The FSC postponed the acceptance process to further investigate the “money laundering suspicion” related to Binance, the report noted.

South Korean journalist, Hong Hong-young, noted that there is a possibility that the acquisition bid will be canceled, given the suit filed by the US Securities and Exchange Commission (SEC) against Binance and its CEO, Changpeng Zhao, for securities law violations.

The local report highlighted the SEC’s allegation of Binance misappropriating billion-dollar customer assets, accusing the exchange of inflating crypto trading volumes and remitting customer funds to a separate crypto-related company.

In March, Binance also faced a lawsuit from the US Commodity Futures Trading Commission (CFTC) for evading registration obligations and violating trading and derivative trading regulations.

The exchange is also under investigation by the US Prosecutors’ Office and the Internal Revenue Service for violating anti-money laundering laws. At the same time, Binance is under pressure from the SEC for supporting unregistered securities trading.

Due to these legal issues, the FSC has already delayed accepting a report of change of registered board members submitted by Gopax. The report includes information regarding appointing three Binance executives to the board of Gopax.

While the delay in accepting the report of business change is expected to affect the withdrawal of GoFi deposit assets, Binance had reportedly promised to fully repay the principal and interest of Gopax if an acquisition contract was signed.