Regulation
Binance adapts to South Korean laws
Binance is reducing its majority stake in South Korean local exchange Gopax to around 10%. Gopax is one of the top five won trading platforms in Korea.
The South Korean market is preparing for new laws to come into effect on July 19, as the one-year period for the Virtual Asset User Protection Act expires.
Binance to Reduce Stake in Gopax to 10%
Local media reported that negotiations were underway between Binance and South Korean cloud service provider Megazone to sell Binance’s majority stake in Gopax. acquired a majority share of 72.6% and management rights via a stake acquisition in February 2023. For Binance, this had been a back to school on the market after its release in 2021, but it facing opposition from regulators.
The sale happens to be a regulatory measure imposed by local financial authorities, which aims to improve the governance structure of the Gopax platform. The local exchange will renew its real-name account contract with Jeonbuk Bank next month, when its two-year real-name account contract expires.
“Binance is pushing for the share sale to improve its governance structure as requested by financial authorities. This is to process a change report before the renewal of its real-name account contract with Jeonbuk Bank in August. A conclusion will be reached later this month,” the local media outlet said. reported.
Learn more: Binance Review 2024: Is It The Right Cryptocurrency Exchange For You?
This is the last opportunity for Binance and Gopax to maintain their status as a won exchange. The assumption comes as Binance needs to improve its governance structure to complete the real-name account renewal contract. This is essential for Gopax, given its 56 billion won exposure to FTX, compounded by the Bitcoin price crash.
Under the terms of the Special Financial Transactions Act that came into force in June, exchanges must report changes related to the renewal of real-name accounts to the authorities at least one month before the contract is signed.
South Korea weighs new cryptocurrency laws
The regulatory environment in South Korea continues to tighten. The Special Financial Transactions Act in June paved the way for the adoption of the Special Financial Transactions Act. Virtual Asset User Protection Act July 19. With the new law, the Financial Services Commission (FSC), South Korea’s regulator, and the Bank of Korea will jointly supervise cryptocurrency operators and asset custodians in South Korea.
Cryptocurrency exchanges will also have to secure at least 80% of deposits in cold storage and enroll in insurance programs. These measures will ensure the safety of users’ funds, with the ability to compensate in the event of a security breach.
South Korea Financial Supervisory Service (FSS) is also launching a 24-hour monitoring system for local exchanges starting July 19.
Learn more: Cryptocurrency Regulation: What Are the Pros and Cons?
As trading platforms evolve in step with regulatory changes, South Korea continues to solidify its position in the global cryptocurrency arena. In the first quarter (Q1) of 2024, the won ranked as the most traded fiat currency, recording up to $456 billion in trading volumes on exchanges, beating the US dollar with $455 billion in volumes.
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