Binance Secures Approval to Enter South Korea Boosting Role as World’s Largest Crypto Exchange

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Binance Secures Approval to Enter South Korea Boosting Role as World’s Largest Crypto Exchange

The entry of Binance into the South Korean market marks a significant shift in the cryptocurrency landscape. The world’s leading cryptocurrency exchange has completed its acquisition of local exchange GOPAX, after receiving final approval from financial authorities.

Binance’s Acquisition of GOPAX

Binance became the largest shareholder of GOPAX in February 2023, acquiring a 67 percent stake. Following this acquisition, Binance submitted an executive change notification to the Financial Intelligence Unit (FIU) in March 2023. However, the approval process took over two years, primarily due to regulatory concerns.

Regulatory Approval Challenges

The approval from the FIU came late Wednesday night.
Regulators were cautious about potential impacts on anti-money laundering (AML) efforts in Korea.
Binance faced previous legal issues, including a lawsuit by the U.S. Securities and Exchange Commission (SEC) and a fine of $4.3 billion related to AML violations.

The approval from Korean authorities follows a settlement with U.S. regulators and the appointment of a new CEO at Binance, reducing the company’s regulatory burdens.

Impact on the South Korean Market

Binance’s entry is expected to intensify competition among local exchanges such as Upbit and Bithumb. As of now, Upbit controls 67.9 percent of the market, while Bithumb holds 28.7 percent, creating a near duopoly.

GOPAX’s Future Under Binance

As Binance’s main operation in Korea, GOPAX is poised to enhance its services. Industry insiders predict improvements in deposit and withdrawal services for the Korean won. Additionally, there are plans to expedite the repayment of GOPAX’s debt to its investors.

GOPAX previously faced challenges, including the freezing of approximately 150 billion won (around $106 million) belonging to around 3,000 investors. This freeze occurred after the insolvency of Genesis Trading, which affected customers who had invested in GOPAX’s GOFi deposit product.

GOPAX aims to integrate Binance’s technological capabilities and liquidity.
This integration could significantly shift the market dynamics among cryptocurrency exchanges in Korea.

Experts suggest that although Binance’s entry into the Korean market could lead to increased competition, concerns remain about the governance and internal controls of its global headquarters.