Binance CEO Makes Secret Trip To South Korea, What’s Happening?

March 31, 2024

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Richard Teng, the CEO of Binance, the world’s leading cryptocurrency exchange, has sparked speculations with his recent discreet visit to Korea. Industry watchers are assuming Teng’s visit signals the initiation of direct talks with local financial authorities to address the impasse surrounding the acquisition of Gopax.

According to local news source, News 1, the Binance CEO’s secret visit is to establish communication channels with financial regulators, including meetings with officials from the Financial Intelligence Unit (FIU), to resolve all issues surrounding Gopax.

Gopax Acquisition Faces Bureaucratic Hurdles

Binance had at the close of 2022 acquired Gopax to use that to facilitate Binance’s entry into the Korean market. However, due to bureaucratic hurdles, the Korean financial authorities have withheld approval for Gopax’s change of virtual asset business report for over a year.

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The acquisition of Gopax by Binance was prompted by the former’s inability to refund users’ assets following the FTX incident. Binance assumed responsibility for Gopax’s debts and hired Leon Singh Pung, a former head of Binance Asia Pacific, as CEO.

Korea FIU’s Skepticism

Despite these efforts, the FIU has repeatedly postponed its decision to accept Gopax’s change report. The FIU’s reluctance stems from concerns about Binance’s legal liabilities, particularly in light of the $4.3 billion fine imposed by the U.S. Department of Justice last year. This and the allegation of aiding terrorist groups such as Hamas have caused the financial authorities to scrutinize Binance’s eligibility as a majority shareholder.

As a concession to address the stalemate, Binance announced plans to divest a portion of its shares in Gopax and relinquish its majority stake. However, the FIU has requested Gopax’s partner bank, Jeonbuk Bank, to devise a plan to enhance Gopax’s governance structure by March’s end.

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Will Binance CEO Broker a Deal?

Industry watchers are speculating that during his visit, Teng will engage in discussions with Korean officials to devise strategies for rescuing Gopax and improving its governance framework. Teng’s background as a former member of the Monetary Authority of Singapore (MAS) they believe may give him leverage to have direct communication with Korean financial authorities.

Meanwhile, Binance has bolstered its regulatory compliance efforts by hiring additional government officials from the Financial Supervisory Service to focus on enhancing Gopax’s governance structure.