Navigating New Crypto Regulations, Binance Cuts Gopax Stake by Over 60%
Navigating New Crypto Regulations– Binance is reducing its majority stake in South Korea’s local exchange, Gopax, to about 10%. Gopax is one of the top five trading platforms for the Korean Won.
Binance Plans to Reduce Gopax Stake to 10%
According to local media reports, Binance is currently in negotiations with South Korean cloud service provider Megazone to sell its majority shares in Gopax. Binance had acquired a 72.6% majority share and management rights through a stake acquisition in February 2023, marking its re-entry into the market after exiting in 2021 amidst regulatory opposition.
The sale is being compelled by local financial authorities as part of efforts to enhance the governance structure of the Gopax platform. Additionally, the local exchange is set to renew its real-name account contract with Jeonbuk Bank next month, as their initial two-year agreement is expiring.
This represents the final chance for Binance and Gopax to retain their status as a Korean Won exchange. This assumption arises because Binance must enhance its governance structure to finalize the renewal of its real-name account contract. This renewal is crucial for Gopax, especially given its exposure of 56 billion Won to FTX, exacerbated by the recent slump in Bitcoin prices.
Under the terms of the Special Financial Transactions Act, which came into effect in June, exchanges are required to report any changes related to real-name account renewals to the authorities at least one month before signing the contract.
South Korea Adjusts to Recent Crypto Law Changes
The regulatory landscape in South Korea is becoming more stringent. The introduction of the Special Financial Transactions Act in June paved the way for the implementation of the Virtual Asset User Protection Act on July 19. Under this new act, the Financial Services Commission (FSC), South Korea’s regulatory body, will collaborate with the Bank of Korea to oversee crypto operators and asset custodians in the country.
Crypto exchanges will now be required to secure at least 80% of deposits in cold storage and participate in insurance programs. These measures are aimed at ensuring the safety of user funds and providing compensation in case of security breaches.
Additionally, South Korea’s Financial Supervisory Service (FSS) is launching a 24-hour surveillance system for local exchanges, starting from July 19.
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