Binance Expands Footprint In South Korea As France Ramps Up Crackdown

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Binance, the world’s largest cryptocurrency exchange by trading volume, has successfully completed its acquisition of South Korean-based digital asset exchange Gopax.

Binance’s Gopax Stake Finalized

On October 16, industry sources reported that South Korean financial authorities had finalized their review of Gopax’s executive changes, which had been pending for an extended period. Binance initially acquired a 67% stake in Gopax back in February 2023, positioning itself as a major shareholder. 

However, the approval process for the executive changes submitted to the Financial Intelligence Unit (FIU) had stalled for nearly two and a half years, as regulators were cautious about the potential implications of Binance’s ownership on South Korea’s anti-money laundering (AML) framework.

The scrutiny surrounding Binance is heightened by its legal troubles in the US, where the Securities and Exchange Commission (SEC) under its previous Chair Gary Gensler, accused the exchange in June 2023 of unlawfully providing services to US customers and misappropriating customer funds. 

The US Treasury Department and the Department of Justice (DOJ) also charged Binance with violating AML regulations, resulting in a hefty fine of $4.3 billion. This ultimately led the exchange’s former CEO Changpeng Zhao, CZ, to resign and serve four-months in prison. 

France Steps Up AML Efforts For Crypto Exchanges

Currently, South Korean law does not mandate a distinct eligibility screening process for major shareholders of cryptocurrency exchanges. Instead, the regulation requires that those seeking to operate in the digital asset sector, along with their executives, report to the FIU. 

Additionally, individuals who have been fined for offenses related to concealing criminal proceeds, financing terrorism, or violations of foreign exchange and capital market laws are prohibited from operating a business in this sector. This regulatory framework has led South Korean authorities to carefully evaluate Binance’s qualifications for entering the market.

Simultaneously, France is intensifying its anti-money laundering efforts concerning cryptocurrency exchanges. According to Bloomberg, regulatory bodies are working to assess over 100 entities that have registered to offer crypto services, aiming to determine which will receive permits for operations across the European Union. 

The French prudential supervision and resolution authority, known as ACPR, has been conducting thorough checks on numerous exchanges, including Binance, since late last year, according to confidential sources familiar with the situation.

At the time of writing, Binance Coin (BNB), the native token of the exchange, has been one of Friday’s worst performers following weeks of major rallies towards new all-time highs above $1,360. The fourth-largest cryptocurrency by market cap is currently trading at $1,074, having recorded losses of 7% over the last 24 hours. 

Featured image from DALL-E, chart from TradingView.com

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