Binance Is Being Disconnected By Gopax After SEC Lawsuit

June 19, 2023 - Around 3 mins mins to read

Key Points:

Gopax held a board meeting on the 19th and decided to appoint a new CEO to replace the former director position of Binance.
Binance’s acquisition of Gopax is under review by Korean authorities.

According to local news sources, Gopax named Lee Joong-hoon as the new CEO, while previous CEO Leon Poong, who was sent from Binance, was fully removed from the management.

Binance Is Being Disconnected By Gopax After SEC Lawsuit

In the afternoon of the 19th local time, Gopax had a board meeting and resolved to appoint Lee Joong-hoon as CEO. Gopax hired Leon Poong, General Manager of Binance Asia Pacific, as CEO in February, but he resigned after four months.

Binance filed a report on the change of virtual asset service provider (VASP) to the Financial Intelligence Unit (FIU) when purchasing Gopax. Since the FIU’s certification of Leon Poong’s representative system took a long time, the card for changing the representative director was ultimately pulled out in a hurry.

Leon Poong is also reported to have resigned from the executive role of the Streamy registration award, which administers Gopax. Leon Poong did not manage the business change report appropriately, resulting in a verbal warning from the FIU.

Recently, South Korea’s financial watchdog claimed it was having problems accepting Binance’s proposal to purchase crypto exchange GOPAX because the SEC had accused Binance and its founder Changpeng Zhao of breaking security legislation.

The Financial Services Commission (FSC), South Korea’s financial authority, is specifically looking into Binance’s purchase of local crypto trading site Gopax. After its evaluation of the Gopax acquisition agreement, the FSC determined that accepting the repurchase request at this time would be problematic due to suspected securities law breaches and the SEC’s request to freeze Binance.US assets. According to one of the FSC officials, it is critical to study the SEC lawsuit.

Binance previously made a large investment in Gopax shares in February of this year with the purpose of re-entering the Korean crypto market after a two-year absence.

Binance’s purchase of Gopax is intended not only to re-enter the Korean cryptocurrency industry but also to revitalize the trading platform. With the failure of crypto exchange FTX and the bankruptcy of Genesis Global Capital, Gopax previously ceased withdrawals and interest payments from its GoFi decentralized finance (DeFi) service in November 2022.

Digital Currency Group, Genesis’ parent firm, is believed to be Gopax’s second-largest stakeholder and a major commercial partner, offering its GoFi product. Binance’s takeover deal pledges to inject additional cash into the Gopax exchange in return for withdrawals and interest payments from GoFi consumers.

Binance is being sued by the Securities and Exchange Commission (SEC) for allegedly misusing consumer cash and violating multiple securities laws. The SEC has charged the exchange and its CEO, Changpeng Zhao, with 13 counts.

The exchange filed a number of complaints with the US Commodities Futures Trading Commission (CFTC) and the SEC, indicating that the financial authorities’ primary stance is that there is grounds for disqualification as a key shareholder of Gopax. It seems that the new CEO’s ability to convince the financial authorities will decide Gopax’s destiny.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

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