South Korean lawmaker Rep. Min Byung-dug of the ruling Democratic Party has questioned Financial Services Commission (FSC) Chairman Lee Eog-won over Binance’s commitment to reimburse investors impacted by GOPAX’s failed GoFi program.
The exchange’s GoFi product, which offered users interest on their crypto deposits, froze approximately 150 billion won ($106 million) in customer funds following the 2022 FTX collapse, leaving around 3,000 investors affected.
The inquiry came during a parliamentary hearing after the FSC approved Binance’s long-delayed acquisition of GOPAX. Min argued that investor compensation was supposed to be a prerequisite for the deal but said no clear repayment plan has been outlined. He criticized the takeover as “a merger not backed by capital,” calling on regulators to ensure Binance fulfills its obligations.
Binance’s GOPAX Deal Approval Sparks Political Debate in South Korea
Binance finalized its agreement to acquire GOPAX in 2023 as part of its broader expansion into the South Korean crypto market. However, the Korea Financial Intelligence Unit (KoFIU) initially blocked the move, citing Binance’s previous anti-money laundering (AML) violations in the United States.
The acquisition received regulatory clearance only this month, following reports that Binance had resolved compliance issues with US authorities. Yet, the timing of the approval has drawn criticism. Opposition lawmakers questioned why the long-delayed deal was approved just four months after the new administration took office, with some alleging potential political favoritism. Reports have also surfaced suggesting that a senior GOPAX executive is related to a high-ranking official in the Lee Jae Myung government.
In August, South Korea’s financial watchdog ordered domestic crypto exchanges to halt all digital asset lending services, aiming to curb high-risk lending activities until clear regulations are in place.
The move is part of a wider government strategy to promote safer, more structured crypto adoption. Regulators are easing restrictions on institutional participation and preparing to greenlight the country’s first spot crypto exchange-traded funds (ETFs). Meanwhile, President Lee Jae Myung’s administration is developing a stablecoin framework tied to the Korean won, reflecting a more progressive stance toward digital finance even as it enforces tighter market controls.
