Is Binance the harbinger of a return to the South Korean market?

The Financial Intelligence Unit (FIU) of South Korea has resumed the evaluation process for Binance's acquisition of the local exchange Gopax after a two-year hiatus. This situation could provide Binance with an opportunity to return to its South Korean operations, which were halted in 2021. According to information obtained by local media outlet Newsis, the FIU found the official report regarding changes in the senior management of Gopax to be positive and is re-examining the situation.

If approved by the authorities, it is expected that the merger between Binance and Gopax will be completed by the end of 2025. According to South Korean laws, a special eligibility examination is not conducted for major shareholders of cryptocurrency exchanges. In this context, the FIU’s examination of the management changes indicates approval for Binance as a significant shareholder.

Binance purchased 67% of Gopax's shares in February 2023, but the approval process was delayed due to money laundering risk concerns. It has been noted that the ongoing criminal case in the United States has been influential, and Binance paid a fine of $4.3 billion as part of a settlement with the U.S. Department of Justice in 2023. This situation has contributed to a positive decision by the FIU.

Gopax is one of only five South Korean exchanges authorized to conduct fiat-crypto transactions. However, this platform has faced serious issues, such as the freezing of around $47 million in customer assets following the bankruptcy of its DeFi partner Genesis Global Capital in 2023. Binance plans to acquire the exchange to compensate for these losses and to provide payments to Gopax users.

Due to the prolongation of the acquisition process, Binance is considering selling a portion of its shares to the local cloud company Megazone in 2024, although this agreement has not yet materialized, and Binance continues to be the largest partner of Gopax.

These developments are considered a critical turning point for Binance in terms of strengthening its operations in Asia if it receives potential approval to return to the South Korean market.