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Breaking: Binance Targeted By South Korea Regulators After US Regulatory Action

South Korea's financial regulators raises concerns over Binance's acquisition of GOPAX amid regulatory crackdown by the U.S.
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Breaking: Binance Targeted By South Korea Regulators After US Regulatory Action

Crypto exchange Binance’s entry into the South Korean crypto market has raised concerns amid financial authorities in the country. The world’s largest exchange Binance acquired a majority stake in South Korea’s fifth-largest crypto exchange GOPAX on February 3 to re-enter South Korea after two years.

Binance’s entry into South Korea risks an increase in financial crimes in the country, reported local media Chosun Ilbo on February 23. According to South Korean financial authorities, financial crimes such as money laundering, illegal foreign exchange transactions, and fraud could increase due to hidden details on Binance’s management, governance structure, business method, and accounts.

A high-ranking official from the financial authorities said:

“If Binance conducts exchange business in South Korea, it will be difficult to properly supervise it. There is a possibility of outflow of national wealth through the distribution of several unverified overseas listed coins.”

The South Korean regulator is considering regulating Binance, requiring it to reapply for a virtual asset service provider (VASP) license in the country. GOPAX under new owner Binance will be re-accredited as a virtual asset operator (VASP). The authorities are reconsidering whether to continue or remove bank’s ties with GOPAX after the acquisition by Binance.

Binance purchased the majority stake from CEO Lee Jun-haeng, who had a 41.2% stake in GOPAX. Barry’s Silbert’s Digital Currency Group is the second largest shareholder of GOPAX. The crypto exchange Gopax has already replaced key executives with Binance personnel, such as appointing Binance’s Asia Pacific representative Leon Pung as the new CEO.

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Binance Facing Regulatory Attack in the U.S.

Binance faces heightened scrutiny following the collapse of FTX. The US SEC and the NYDFS targeted Paxos to stop minting Binance USD (BUSD) stablecoin on Feb 13, defining it as a security.

The U.S. DOJ is investigating Binance for possible money laundering violations. Moreover, Binance announced that it is ending business relationships with partners in the U.S. due to stringent regulatory conditions.

However, South Korea’s regulators also consider ending Upbit’s monopoly in the country with Binance’s entry in South Korea.

Also Read: Ethereum Price To Hit $2,000? Popular Analyst Predicts Best Level To Buy

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Varinder Singh

Varinder has over 10 years of experience and is known as a seasoned leader for his involvement in the fintech sector. With over 5 years dedicated to blockchain, crypto, and Web3 developments, he has experienced two Bitcoin halving events making him key opinion leader in the space. At CoinGape Media, Varinder leads the editorial decisions, spearheading the news team to cover latest updates, markets trends and developments within the crypto industry. The company was recognized as Best Crypto Media Company 2024 for high impact and quality reporting. Being a Master of Technology degree holder, analytics thinker, technology enthusiast, Varinder has shared his knowledge of disruptive technologies in over 5000+ news, articles, and papers.

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Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
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