SEC Lawsuit Threatens Binance's South Korean Expansion

(MENAFN- CoinXposure) The lawsuit filed by the United States securities and exchange commission (SEC) against Binance could harm the Cryptocurrency exchange's business prospects in South Korea.

According to a report in a South Korean newspaper, the financial Service Committee (FSC), the country's financial regulator, is examining Binance's Acquisition of the local cryptocurrency trading platform Gopax.

In February, Binance acquired a majority stake in Gopax to reenter the South Korean cryptocurrency market after a two-year absence.

Reportedly, the FSC has suspended Gopax's March 7 executive change report, citing the recent SEC lawsuit.

The report described the nomination of three Binance members, including the CEO of binance asia pacific , as inside directors of Gopax.

In its review of the Gopax acquisition, the FSC stated that it was challenging to approve the acquisition request at this time, given the allegations of securities law violations and the SEC's repeated requests to freeze Binance.US holdings.

One of the executives from FSC stated that it is crucial to consider the SEC's litigation, adding that:

Binance's acquisition of Gopax was not only about the crypto exchange's reentry into South Korea but also about the revival of the troubled local crypto trading platform.

Gopax ceased principal and interest withdrawals from its decentralized finance service GoFi in November 2022, following the demise of the FTX cryptocurrency exchange and the bankruptcy of digital asset financial services firm Genesis.

See also gemini, genesis seek dismissal of sec's lawsuit 2 weeks ago

According to reports, the Digital Currency Group, the parent company of Genesis, was Gopax's second-largest shareholder and a significant business partner supplying its GoFi product.

The acquisition agreement by Binance promised to inject new funds into the Gopax exchange for user withdrawals and GoFi interest payments.

In its lawsuit against Binance, the SEC alleged that the cryptocurrency exchange commingled customer funds and violated numerous securities laws.

The SEC has filed thirteen counts against the exchange , its subsidiaries, and its chief executive officer.



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