While Binance saw the acquisition of Gopax as a way to re-enter South Korea, it was also meant to be a turning point for the local trading platform.
The lawsuit filed by the SEC against Binance is beginning to affect the company’s operations, particularly its acquisition of Gopax in South Korea. The US Securities and Exchange Commission has filed a case against Binance for violating securities law. According to the filing in the Washington federal court, Binance mishandled investors and also misled investors and regulators. The commission also alleged that the exchange had broken the rules by allowing Americans to trade in an unsafe and unprotected environment.
SEC Enforcement Division Director Gurbir S wrote and added that the company is putting its clients and investors at risk to maximize its profits. The SEC executive said that Binance has participated in several unregistered offerings. Grewal continued:
“While simultaneously bringing together the functions of exchanges, brokers, dealers, and clearing agencies, the Binance platforms under Zhao’s control pose significant risks and conflicts of interest to investors.”
Binance faces a challenge with Gopax acquisition
Now, the legal case has become an obstacle to the business opportunity that Binance has with Gopax. South Korean a report It revealed that the Financial Services Commission (FSC) is reviewing the Binance acquisition of Gopax. In light of the SEC’s allegations, the country’s financial watchdog decided to monitor the case as it progressed. Notably, Binance purchased a majority stake in Gopax in February. However, the regulator has deferred the report and acceptance of the Notice of Change of Business filed by Gopax regarding the Binance deal. The local cryptocurrency exchange filed an executive change report on March 7th.
Aside from the SEC accusations, Binance is also under the radar of the US Commodity Futures Trading Commission (CFTC). The CFTC sued the exchange in March for violating trading regulations, derivatives trading and evading registration obligations. In addition, the company has a case with the US Attorney’s Office and the US Internal Revenue Service for breaching anti-money laundering laws.
The Financial Services Commission finds it difficult to accept the report due to the alleged accusations from the Securities and Exchange Commission and other requests to seize all assets belonging to the US arm of Binance. In a sign that the SEC’s direction cannot be ruled out, an FSC official said it was “cautious to say that the report is being reviewed internally.”
While Binance saw the acquisition of Gopax as a way to re-enter South Korea, it was also meant to be a turning point for the local trading platform. After the collapse of cryptocurrency exchange FTX in November 2022, Gopax halted withdrawals of principal and interest payments from DeFi service GoFi. Thus, the Binance deal was supposed to reinvigorate the turbulent exchange.
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Ibukun is a crypto/financial writer interested in passing on relevant information, using uncomplicated words to reach all types of audiences. Apart from writing, she loves watching movies, cooking, and exploring restaurants in the city of Lagos where she is staying.