Korean Lawmaker Pressures Binance to Compensate Victims of GOPAX’s Frozen GoFi Funds
Pressure is mounting on Binance, the world’s largest cryptocurrency trade, to compensate victims of GOPAX’s GoFi deposit program, after a South Korean lawmaker raised the problem throughout a parliamentary listening to this week.
Key Takeaways:
- South Korean lawmakers are urgent Binance to compensate round 3,000 GoFi buyers.
- The investor’s $106 million in funds stay frozen because the 2022 FTX collapse.
- Rep. Min Byung-dug questioned regulators on why Binance’s GOPAX acquisition was authorised and not using a clear compensation plan.
On Monday, Rep. Min Byung-dug of the ruling Democratic Party of Korea questioned Financial Services Commission (FSC) Chairman Lee Eog-won, demanding readability on whether or not Binance intends to fulfill its reported promise to reimburse buyers.
The listening to adopted the FSC’s current approval of Binance’s long-delayed acquisition of GOPAX, in accordance to a report by The Korea Times.
GOPAX’s GoFi Investors Still Frozen Out After FTX Collapse Locks $106M in Funds
GoFi was a high-yield deposit product launched by GOPAX, permitting customers to earn curiosity on their crypto holdings.
However, after the 2022 collapse of FTX, GoFi-linked buyer funds, totaling round 150 billion received ($106 million), have been frozen, affecting roughly 3,000 buyers.
Min argued that compensation was supposed to be a precondition for Binance’s takeover however mentioned no compensation plan has but been offered. “This is a merger not backed by capital,” he mentioned, urging regulators to guarantee accountability.
Binance had agreed to purchase GOPAX in 2023 as half of its push into the South Korean market.
However, the Korea Financial Intelligence Unit (KoFIU) initially blocked the deal, citing Binance’s previous anti-money laundering (AML) violations within the United States.
The acquisition was solely approved this month after Binance reportedly addressed compliance issues with US authorities.
Still, the timing of the approval has stirred controversy. Opposition lawmakers questioned why the long-stalled acquisition was abruptly cleared simply 4 months after the brand new administration took workplace.
Some even prompt political affect, pointing to reviews {that a} senior GOPAX government is said to a high-ranking official within the Lee Jae Myung administration.
Korean Lawmaker Alleges Binance Ties to Cambodia’s Prince Group
Adding to the scrutiny, Rep. Kim Jae-sub of the People Power Party raised allegations linking Binance to Cambodia’s Prince Group, a conglomerate cited by US authorities for alleged cash laundering and human trafficking actions.
Kim referenced US Treasury reviews noting Binance’s platform was used to transfer illicit funds for the group.
He additionally recalled that Binance founder Changpeng Zhao (CZ) was fined $4 billion and barred from working within the US.
In response, Rep. Kang Min-kuk urged a probe into 5 Korean banks that reportedly dealt with abroad remittances totaling 3.96 billion received tied to the Prince Group.
FSC Chair Lee confirmed the fee is coordinating with overseas and finance ministries to consider potential sanctions.
In August, South Korea’s monetary regulator moved to rein in risky lending practices within the digital asset sector, ordering native exchanges to droop all crypto lending companies till a correct regulatory framework is established.
The crackdown got here amid South Korea’s broader pivot towards regulated crypto adoption. Authorities are lifting restrictions on institutional buying and selling and making ready to approve the country’s first spot crypto ETFs.
President Lee Jae Myung’s administration can be working on a stablecoin framework pegged to the Korean received, signaling a extra open method to digital finance regardless of the most recent curbs.
The submit Korean Lawmaker Pressures Binance to Compensate Victims of GOPAX’s Frozen GoFi Funds appeared first on Cryptonews.
