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

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  • 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.

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