South Korea’s Financial Services Commission has put Binance’s acquisition of South Korean crypto exchange GoPax on pause while it monitors news surrounding the Securities and Exchange Commission’s (SEC) enforcement action against Binance.
Newspim, a local South Korean news site, reported that the country’s financial regulator is monitoring recent events surrounding Binance, including the SEC lawsuit, in relation the acquisition of GoPax by Binance.
The financial regulator had already delayed the acquisition in April due to money laundering allegations, according to the report.
Binance announced that it would re-enter the South Korean market in February by buying a majority stake in GoPax. The funding of the purchase came from Binance’s recovery fund, which was set up in response to the fallout of the collapse of crypto exchange FTX. GoPax’s parent company Streami Inc. is listed as one of the largest creditors of bankrupt crypto lender Genesis Global, Bloomberg reported.
GoPax halted withdrawals for certain products due to the exposure to Genesis Global. Binance planned to inject capital into the exchange to enable those withdrawals, said Yibo Ling, Binance’s chief business officer, in an interview with Bloomberg.
Binance closed its operations in South Korea in December 2020 due to low usage and volumes. The region is known for having a strong interest in crypto trading but was rocked by the multi-billion dollar collapse of the Terra-Luna blockchain ecosystem, which was founded by Do Kwon, a South Korean national. The country’s authorities issued an arrest warrant for Kwon and several other Terra executives for violating capital markets laws.
Binance declined to comment on the news. The Financial Services Commission and GoPax did not immediately respond to a request for a comment.
03:43 AM EST: This story has been updated to provide clarity from Binance on the news.