By
Mayowa Adebajo
May 9th, 2024
Binance is reportedly not planning to expand its footprint in South Korea amid growing regulatory scrutiny and is willing to sell its stake in Gopax.
Binance has confirmed its involvement in early-stage discussions over its majority stake in the South Korean cryptocurrency exchange, Gopax. This revelation comes in response to reports circulating in South Korean media about Binance’s potential sale of its majority stake in Gopax.
A Binance spokesperson told DL News that due to the preliminary nature of these discussions, they cannot disclose more details at this point. Binance acquired a majority stake in Gopax last year in February 2023. It was the same time when Gopax was facing operational challenges and had temporarily halted withdrawals on its DeFi platform GoFi.
This move was more of Binance signaling its return to the South Korean market, after its exit back in January 2021. To re-enter the South Korean crypto market, Binance also bought a stake in other local exchanges. This is because the exchange faces a few regulatory hurdles in South Korea for making a direct entry.
Just like South Korea, Binance also made a similar move in other global markets. For example, Binance withdrew from the Japanese market after receiving warnings from regulators in 2018 and 2021, citing unauthorized operations.
In November 2022, Binance acquired Sakura Exchange BitCoin, based in Osaka, which was already registered with regulators. The exchange was rebranded as Binance Japan in August 2023. Binance’s ongoing discussions coincide with increased regulatory scrutiny on cryptocurrency companies in Asia.
South Korea’s Regulatory Actions
The South Korean regulators have stayed vigilant to the developments in the crypto space. The regulatory scrutiny has surged further after major frauds rocked the crypto market back in 2022.
Starting this year in 2024, South Korea will initiate the disclosure of cryptocurrency holdings for high-ranking public officials, representing a significant move toward transparency and accountability in government affairs.
As per the Ministry of Personnel Management’s announcement, around 5,800 elected officials and government employees will be required to report their cryptocurrency assets next year. This initiative is a key component of South Korea’s public ethics and transparency system, focusing on property registration and reviews for individuals in public service roles.
Earlier this month, South Korean financial authorities introduced a proposal to prohibit the use of credit cards for cryptocurrency payments within the country. The Financial Services Commission (FSC) issued a legislative notice outlining amendments to the Enforcement Decree of the Credit-Specialized Financial Business Act. The proposed amendment aims to incorporate a new clause into the current law, aiming to prevent individuals in the region from utilizing their credit cards for transactions related to digital assets.