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The U.S. Securities and Exchange Commission (SEC) lawsuit against Binance could harm the cryptocurrency exchange’s business opportunities in South Korea.
A report published in a South Korean daily newspaper states that the Financial Services Committee (FSC), South Korea’s financial supervisory authority, is considering Binance’s acquisition of local cryptocurrency trading platform Gopax. Binance acquired a majority stake in Gopax in February of this year, intending to return to the South Korean cryptocurrency market in two years.
The FSC has reportedly suspended its review of Gopax’s March 7 report on management changes, citing a recent SEC lawsuit. The report details the appointment of three Binance members as internal directors of Gopax, including Leon Singh Pung, CEO of Binance Asia Pacific.
FSC, in its review of the Gopax deal, stated that it was very difficult to accept the acquisition request at this point, given the alleged allegations of securities violations and further SEC requests to freeze Binance’s assets. US. One FSC executive said it was important to review the SEC lawsuit, adding:
“Be wary of saying that the report is under internal review,”
The acquisition of Binance Gopax was not only about the return of the cryptocurrency exchange to South Korea, but also about the resurgence of the troubled local cryptocurrency trading platform. Gopax stopped withdrawing principal and interest from its decentralized finance (DeFi) service GoFi in November 2022 following the collapse of cryptocurrency exchange FTX and the bankruptcy of Genesis Global Capital.
Related: Binance lawsuit: 61 cryptocurrencies are now treated as securities by the SEC
Parent company Genesis Digital Currency Group was reportedly the second largest shareholder of Gopax and a key business partner providing its GoFi product. The deal to acquire Binance promised to send new capital to the Gopax exchange for customer withdrawals and interest payments on GoFi.
The SEC lawsuit against Binance accuses the cryptocurrency exchange of mixing customer funds and violating various securities laws. The SEC has filed 13 charges against the exchange and its CEO, Changpeng Zhao.