According to the latest reports, the South Korean Financial Intelligence Unit’s (FIU) delay in reviewing the virtual asset service provider (VASP) change report of the crypto exchange Gopax, would result in the dissolution of Binance’s acquisition of Gopax, detaining Gopax investors’ asset recovery.
Previously, on February 3, 2023, the leading crypto exchange Binance announced its return to South Korea by acquiring a majority stake in the beleaguered South Korean crypto firm Gopax. In November 2022, Gopax halted withdrawals in its DeFi service GoFi, resulting from the challenges experienced by the financial service provider Genesis Global Capital.
Recognizing Gopax’s commitment to the community, Binance pledged to contribute $1 billion to secure the reimbursement of the affected Gopax users. The company stated that:
Binance…shares its goal of raising user protection standards by fostering a sustainable and responsible environment for cryptocurrency investments and trading in South Korea…Binance will inject capital into GOPAX with the objective of securing in full any potential GoFi users’ withdrawal requests against all staked deposits, including interest.
Though Binance submitted Gopax’s VASP change report to South Korea’s financial authority, the FIU hasn’t reviewed the report. Though it was expected that the report would be evaluated and resolved within 45 days of submission, the review period has been further extended pointing out the requirement of the supplementation of documents.
Consequently, the crypto industry anticipates the risk of Binance withdrawing its proposal to acquire the fallen exchange if the authority continues to slow down the resolution; recently Binance dropped its plans to buy the crypto firm Voyager Digital when the US regulations were tightened.
Significantly, a person familiar with the matter commented that authority’s pressure would “discourage” Binance, adding:
The amount of advance money that Binance has preemptively injected into Gopax to solve the GoFi problem is about 20 billion won. If the pressure from the authorities is judged to be exceptionally severe, it may discourage them from re-entering the country.
Moreover, if Binance’s acquisition of Gopax fails, the victims who have been affected by the debacle of the company would remain unpaid.
