Binance CEO Richard Teng reportedly made a secret visit to South Korea to establish direct contact with local financial authorities and find a solution to the obstacles the company faced in entering the Korean market. Teng arrived in Korea last week on an unannounced schedule and intended to communicate with financial officials, including those from the Financial Intelligence Unit (FIU), during his visit. This move came after Binance’s plan to make a direct entry into the high-volume South Korean market by purchasing a majority stake in the South Korean crypto exchange Gopax was blocked.
Binance Seeks Entry into South Korean Market
Binance acquired Gopax at the end of 2022 as part of its strategy to enter the Korean market. However, the acceptance of Gopax’s business report change as a cryptocurrency platform by financial authorities has been delayed for over a year, hindering Binance’s plans to enter this market.
Binance’s decision to purchase Gopax stemmed from Gopax’s inability to refund users following the FTX incident related to its crypto asset deposit service ‘GoFi’. When Binance became the majority shareholder, it took on the responsibility for GoFi’s debt and appointed Leon Singh Pung, the former president of Binance Asia Pacific, as the CEO of Gopax.
Despite submitting a report to the FIU about the change in the crypto asset business, the decision on its acceptance has been continuously postponed.
FIU Continues to Delay Decision on Gopax
While Gopax made headlines with a CEO change, the appointment of Cho Young-joong, former CEO of Citi Labs, as the new CEO in place of Lee Jung-hoon stood out. However, this change report is waiting under the strict scrutiny of the Financial Intelligence Unit (FIU).
Another factor influencing the change at Gopax was the purchase of a portion of Binance’s shares by BF Labs. This move led to another change in Gopax’s CEO, transitioning to a period led by Cho Young-joong.
However, the FIU’s reluctance to approve Gopax’s change report is linked to Binance’s legal risks. Binance was recently fined heavily by the US Department of Justice, increasing the FIU’s concerns.
Binance’s Response
In response to the FIU’s strict approach, Binance decided to sell its shares in Gopax and relinquish its majority stake. In addition to this decision, the FIU requested Gopax to present a plan from Jeonbuk Bank to improve its governance structure.
Last month, Gopax took a new step by offering its users the opportunity to reduce Binance’s shares and increase their own ownership. ‘Gopai’ users encountered an offer to convert their bonds into stock.
Visit May Contribute to Solving Problems
Teng’s meetings with government officials in South Korea are expected to shed light on strategies planned to rescue Gopax. Known for placing a high priority on compliance, Teng’s visit as Binance CEO is thought to reflect his efforts in this area.
As a former member of the Monetary Authority of Singapore (MAS), Teng’s direct communication with Korean financial authorities is seen as a significant indicator of his determination in cooperation and compliance. Notably, Teng’s visit to Korea before becoming Binance CEO and his meetings with Gopax and Jeonbuk Bank officials while serving as a regional market manager underscore his active role in Korea’s financial ecosystem.
