The Korean government is expected to approve Binance’s majority stake in the domestic crypto exchange GOPAX as early as the end of this year.
The approval follows a rare two-and-a-half-year delay. Analysts believe the positive shift is due to the resolution of Binance’s regulatory issues in the US.
Review Process Delayed for Two Years
On Tuesday, local media reported that the Financial Intelligence Unit (FIU) has resumed reviewing GOPAX’s executive change report.
Binance acquired a 67% stake in GOPAX in February 2023 and submitted an “executive change report” to the FIU in March of the same year. According to South Korean law, the FIU is required to approve or deny such a report within 45 days. However, the FIU repeatedly requested additional documentation, resulting in the review being stalled for nearly two and a half years.
The FIU’s cautious stance stemmed from concerns that Binance’s acquisition could impact South Korea’s anti-money laundering (AML) framework. South Korean law prohibits individuals from operating a crypto business. However, this is the case if they have been convicted of crimes like money laundering or terrorism financing. The executive change report was a de facto suitability review for Binance’s majority shareholders.
US Legal Issues Cleared
The government’s concerns were based on reality. In June 2023, the US Securities and Exchange Commission (SEC) sued Binance for illegally offering services to US users and misusing customer funds. Binance was also charged with violating anti-money laundering laws and ordered to pay a fine of approximately $4.3 billion.
The fact that the FIU has now resumed its review is a green light for Binance, as the approval would allow it to directly enter the South Korean market through GOPAX. The change in the FIU’s attitude appears to be influenced by the resolution of Binance’s legal issues in the US. The SEC dropped its lawsuit against Binance and its founder, Changpeng Zhao, in May.
In addition, the US Department of Justice and Treasury’s charges were also dropped after Binance paid its fines.
Questions On Liquidation Reports
Meanwhile, there’s growing interest in whether South Korean financial authorities will investigate recent allegations. These allegations claim that Binance underreported the size of liquidations on its platform.
A massive crypto liquidation occurred last Friday after President Donald Trump announced new tariffs on China. Over $19 billion was liquidated in 24 hours, with $706.2 million liquidated on Binance alone.
Some industry figures have accused major exchanges of underreporting the actual statistics. Jeff Yan, CEO of Hyperliquid, stated on his X account, “For example, on Binance, even if there are thousands of liquidation orders in the same second, only one is reported.” He added that “liquidations happen in bursts, this could easily be 100x under-reporting under some conditions.”
