Binance Completes Acquisition of Gopax: Navigating the Regulatory Maze
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Completion of Binance’s Acquisition of Gopax
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In a significant milestone for the cryptocurrency industry, Binance, the globe’s leading cryptocurrency exchange by trading volume, has successfully completed the acquisition of the South Korean digital asset platform, Gopax. Industry insiders revealed on October 16 that South Korean financial regulators had concluded their thorough review of changes to Gopax’s executive team after a protracted evaluation period.
Binance’s Strategic Move
Initially, in February 2023, Binance secured a 67% stake in Gopax, establishing itself as the primary shareholder. However, the formal approval for the executive changes submitted to the Financial Intelligence Unit (FIU) was delayed for almost two and a half years. Regulators exercised caution due to the potential ramifications on South Korea’s anti-money laundering (AML) framework brought about by Binance’s ownership.
Binance’s Legal Challenges in the United States
Adding to the scrutiny, Binance has been embroiled in legal issues in the United States. The Securities and Exchange Commission (SEC), under former Chair Gary Gensler, accused Binance in June 2023 of illegally providing services to U.S. customers and mishandling customer funds. The U.S. Treasury Department, along with the Department of Justice (DOJ), also indicted Binance for infringing AML regulations, resulting in a substantial penalty of $4.3 billion. Consequently, the exchange’s previous CEO, Changpeng Zhao, known as CZ, resigned and served a four-month prison sentence.
France’s Enhanced AML Measures for Crypto Exchanges
In South Korea, the current legislation does not necessitate a separate eligibility screening for major shareholders of cryptocurrency exchanges. The law mandates that those intending to operate in the digital asset domain, along with their executives, report to the FIU. Moreover, individuals with a history of fines for offenses such as concealing criminal proceeds, funding terrorism, or breaching foreign exchange and capital market laws are prohibited from conducting a business in this sector. This regulatory backdrop has prompted South Korean authorities to meticulously assess Binance’s suitability for market entry.
France’s Vigorous Regulatory Scrutiny
Meanwhile, France is rigorously strengthening its anti-money laundering measures concerning crypto exchanges. According to Bloomberg, regulatory authorities are evaluating over a hundred entities that have applied to offer cryptocurrency services, intending to determine which will be authorized to operate within the European Union. The French prudential supervision and resolution authority, known as ACPR, has been conducting comprehensive reviews of numerous exchanges, including Binance, since late last year, as per sources familiar with the matter.
Market Dynamics and Binance Coin Performance
The market dynamics have also seen notable fluctuations. At present, Binance Coin (BNB), the exchange’s native token, has experienced a downturn. Following a series of significant rallies that propelled it to new all-time highs exceeding $1,360, BNB has emerged as one of Friday’s poorest performers. Currently, it trades at $1,074, marking a 7% decline over the past 24 hours.
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