Binance CEO Richard Teng has reportedly made a secret visit to South Korea in an effort to directly engage with domestic financial authorities and find a resolution to the hurdles facing the company’s entry into the Korean market.
According to a recent report by News 1, Teng arrived in Korea on an undisclosed schedule last week, intending to communicate with financial authorities, including officials from the Financial Intelligence Unit (FIU), during his visit.
The move comes as Binance’s plan to find a direct line into the high-volume South Korean market with the acquisition of a majority stake in the South Korean crypto exchange Gopax has hit a barricade.
Binance acquired Gopax at the end of 2022 as part of its strategy to penetrate the Korean market.
However, the acceptance of Gopax’s change of virtual asset business report by financial authorities has been delayed for over a year, impeding Binance’s plans for market entry.
Binance’s decision to acquire Gopax was driven by the latter’s inability to return funds to users following the FTX incident involving its virtual asset deposit service, ‘GoFi.’
Binance took on the responsibility for GoFi’s debt when it became the majority shareholder, appointing Leon Singh Pung, the former head of Binance Asia Pacific, as CEO of Gopax.
Despite submitting a report on the change in virtual asset business to the FIU, the decision regarding its acceptance has been consistently postponed.
#Binance CEO Richard Teng visited South Korea to discuss market entry issues with financial authorities, following Binance’s 2022 entry via Gopax acquisition. pic.twitter.com/hqR0myMnYL
— MrPersonalTrader (@MPersonalTrader) March 31, 2024
FIU Continues to Postpone a Decision on Gopax
Gopax later replaced its CEO with former CEO Lee Jung-hoon and submitted another change report, but the FIU continued to delay its decision.
BF Labs, a KOSDAQ-listed company, then acquired a portion of Binance’s shares, prompting Gopax to replace its CEO once again, this time with Cho Young-joong, the former CEO of Citi Labs.
The FIU’s reluctance to accept Gopax’s change report stems from concerns over Binance’s legal risks.
Binance was recently hit with a hefty $4.3 billion fine from the U.S. Department of Justice, raising questions about Binance’s eligibility as a ‘majority shareholder.’
The FIU is also seeking to broaden the scope of review for virtual asset business renewal reports to include ‘major shareholders’ in the second half of the year, proposing amendments to the Specific Financial Information Act.
In response to the FIU’s firm stance, Binance officially announced earlier this year its decision to sell a portion of its shares in Gopax and relinquish its majority stake.
Additionally, the FIU recently requested Jeonbuk Bank, Gopax’s partner bank for real-name accounts, to submit a plan to enhance Gopax’s governance structure by the end of March.
Gopax sent a request to its users, known as ‘Gopai’ users, last month to convert their bonds into stocks, aiming to decrease Binance’s stake and allow GoFi users to increase their ownership.
Teng to Discuss Governance Improvements in SK Visit
During his visit to South Korea, CEO Richard Teng is expected to discuss governance structure improvements with government officials and devise strategies to rescue Gopax, the report said.
Teng, a former member of the Monetary Authority of Singapore (MAS), is known for prioritizing compliance since assuming the role of Binance CEO.
This direct communication with Korean financial authorities may be a reflection of his commitment to compliance.
Notably, before becoming CEO of Binance, Teng had visited Korea and held meetings with officials from Gopax and Jeonbuk Bank while serving as the regional market manager responsible for regions outside the United States.
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