Regulation
Binance Complies with South Korean Laws
Binance is reducing its majority stake in South Korea’s local exchange Gopax to about 10%. Gopax is one of the top five Won trading platforms in Korea.
The South Korean market is preparing for the new laws to come into effect on July 19, coinciding with the expiration of the one-year period under the Virtual Asset User Protection Act.
Binance to reduce Gopax stake to 10%
Local media reported that Binance is in talks with South Korean cloud service provider Megazone to sell Binance’s majority stake in Gopax. Binance acquired a majority stake of 72.6% and management rights through a stake acquisition in February 2023. For Binance, this had been a come back in on the market after the release in 2021, but has met opposition from regulators.
As it happens, the sale is a regulatory imperative from local financial authorities, aimed at improving the governance structure of the Gopax platform. The local exchange will renew its real account contract with Jeonbuk Bank next month, as their two-year real account contract expires.
“Binance is pushing for a share sale to improve its governance structure as required by financial authorities. This is to process a change report before the renewal of its real account contract with Jeonbuk Bank in August. A conclusion will be reached within this month,” local media reported. reported.
To know 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 won exchanges. The move comes as Binance needs to improve its governance structure to conclude the real-name account renewal agreement. This is crucial for Gopax, given its 56 billion won exposure to FTX, which has been worsened by the collapse of Bitcoin’s price.
Under the terms of the Special Financial Transactions Act, which went into effect in June, exchanges must report to authorities any changes to the renewal of real-person accounts at least one month before the contract is signed.
South Korea Tackles New Cryptocurrency Laws
The regulatory environment in South Korea continues to tighten. The Special Financial Transactions Act in June has set the stage for Virtual Goods User Protection Act July 19. With the new act, the Financial Services Commission (FSC), South Korea’s regulatory body, and the Bank of Korea will jointly supervise cryptocurrency operators and asset custodians in South Korea.
Cryptocurrency exchanges should also safeguard at least 80% of their deposits in cold storage and subscribe to insurance programs. These measures will ensure the safety of user funds, with the ability to compensate in the event of a security breach.
South Korea Financial Supervision Service (Cyber Security Service) will also launch a 24-hour surveillance system for local exchanges starting July 19.
To know more: Cryptocurrency Regulation: What Are the Pros and Cons?
As trading platforms grapple with regulatory changes, South Korea continues to consolidate 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 volume on exchanges, effectively beating the US dollar at $455 billion in volume.
Disclaimer
In compliance with the Trust Project guidelines, BeInCrypto is committed to providing unbiased and transparent reporting. This news article aims to provide accurate and timely information. However, readers are advised to independently verify the facts and consult a professional before making any decisions based on this content. Please note that our Terms and conditions, Privacy PolicyAND Disclaimers They have been updated.