SEC lawsuit halts Binance’s plan to acquire Korean crypto entity

• South Korean regulator halted Binance’s acquisition of a local crypto platform due to U.S. SEC’s enforcement action.
• The SEC has charged Binance, its subsidiaries and its CEO Changpeng Zhao with 13 counts.

The South Korean financial regulator has reportedly put on hold Binance’s acquisition of a local crypto platform due to the enforcement action against the former by the U.S. Securities and Exchange Commission (SEC).

According to a recent report published in a South Korean newspaper the Financial Service Committee (FSC) has halted Binance’s acquisition of a local crypto trading platform named Gopax, now that the U.S. SEC filed a lawsuit against Binance for allegedly offering crypto assets classified as unregistered securities.

It was in February 2023 that Binance acquired a majority stake in Gopax, hoping to re-enter the South Korean crypto market after a two-year period of absence.

The regulatory body reportedly stopped Gopax’s executive change report filed in March, citing the latest U.S. SEC lawsuit. The report documented the appointment of three Binance executives as Gopax inside directors, including Binance Asia Pacific CEO Leon Singh Poong.

In its evaluation of the Gopax deal, the FSC stated that it was extremely difficult to accept the acquisition request at this time, considering the purported allegations of law breaches and subsequent SEC efforts to freeze Binance.US assets.

“It is cautious to say that the report is being reviewed internally,” said an executive from the Korean regulatory body.

The SEC has charged Binance, its subsidiaries and its CEO Changpeng Zhao with 13 counts.

Gopax’s last hope lost?

Following the debacle surrounding the FTX exchange and the digital assets financial services firm Genesis going bankrupt, Gopax suspended the withdrawals of principal and interest payments from its decentralized finance service GoFi in November 2022.

Apparently, the Digital Currency Group (DCG), Genesis’ parent firm, was Gopax’s second-largest stakeholder and a significant commercial partner offering its GoFi product.

Binance’s acquisition agreement pledged to channel new funds into the Gopax exchange for customer withdrawals and interest payments for GoFi.