South Korean Exchange Gopax Facing Delay in Repayment of Funds due to Request for Risk Assessment by Financial Regulators: A Detailed Analysis

On April 24th, it was reported that the South Korean financial regulatory authorities have requested the South Korean exchange Gopax to conduct a risk assessment again after 9 months. At present, the financial authorities are reviewing the Virtual Asset Operator (VASP) change report submitted by Coin An during its acquisition of Gopax, and the review results are expected to be postponed until mid May. Meanwhile, the delay in reviewing the change report will further delay the repayment of funds to users who bind funds in GoFi (Gopax’s cryptocurrency deposit service). Because only after the change is completed can Coin An fully pay the cost of acquiring Gopax and return the customer funds bound to GoFi of 56.6 billion won (approximately $42.39 million). （Edaily）

South Korean financial department requires Gopax to conduct another risk assessment

In recent news, it has been reported that the South Korean financial regulatory authorities have requested the South Korean exchange Gopax to conduct a risk assessment once again after a period of 9 months. This delay in the review process has further delayed the repayment of funds to users who have tied their money in the exchange’s cryptocurrency deposit service, GoFi. This delay has been caused because, after the acquisition of Gopax by Coin An, a South Korean cryptocurrency firm, the Virtual Asset Operator (VASP) change report submitted by Coin An is currently under review by the financial authorities, and the review results are expected to be postponed until mid-May.

Why Has the Risk Assessment Been Requested Again?

It is pertinent to first understand why the South Korean financial regulatory authorities have requested Gopax to conduct a risk assessment again after a delay of 9 months. In the past, the South Korean crypto industry has been plagued with illegal activities such as hacking, money laundering, and fraud. This has resulted in financial losses and a lack of trust in the industry. To counter this, the financial regulators in South Korea have introduced strict measures and policies to regulate the industry and ensure its transparency. Any fluctuation in the position of a cryptocurrency exchange, such as changes in management or ownership, triggers the need for a risk assessment. Hence, after the acquisition of Gopax by Coin An, the South Korean financial regulatory authorities have requested the exchange to conduct a thorough risk assessment again.

Impact of the Delay

The delay in the review process has resulted in a delay in the repayment of funds to users who have tied their money in the exchange’s cryptocurrency deposit service, GoFi. The funds, which are tied to GoFi, amount to 56.6 billion won or approximately $42.39 million. The delay in reviewing the change report has resulted in Coin An not being able to fully pay the cost of acquiring Gopax, thus delaying the process of fund repayment.

What Could be the Next Steps?

It has been speculated that Gopax could take the following steps to address the delay in repayment:

1. Use of Insurance Policy

Gopax has insured its cryptocurrency deposit service, GoFi, against any hacking or similar incidents. The delay in the repayment of funds could be addressed by using the insurance policy to compensate the users.

2. Compensation through Company Funds

If the insurance policy is not applicable, then Gopax could compensate the users through its own financial resources. The company could use its own reserves to repay the funds to the affected users.

3. Cooperation with Financial Regulators

Gopax could cooperate with the financial regulators to expedite the review process of the VASP change report submitted by Coin An. If the review process is completed on time, Coin An will be able to fully pay the cost of acquiring Gopax, and the funds tied to GoFi can be repaid to the affected users.

Conclusion

The delay in the review process of the VASP change report submitted by Coin An has resulted in a delay in the repayment of funds to the users that have tied their money to Gopax’s cryptocurrency deposit service, GoFi. The delay has been caused because the financial authorities are reviewing the virtual asset operator change report submitted by Coin An during its acquisition of Gopax. The feedback for the same has been postponed until mid-May. Gopax can take several steps to address the delay, including using its insurance policy, compensating the affected users through company funds, and cooperating with the financial regulators to expedite the review process.

FAQs

1. What is GoFi?

GoFi is Gopax’s cryptocurrency deposit service where users can deposit and store their cryptocurrencies.

2. Who is Coin An?

Coin An is a South Korean cryptocurrency firm that recently acquired Gopax.

3. Will the delay impact Gopax’s reputation?

The delay in repayment of funds could impact Gopax’s reputation negatively. However, it remains to be seen how the company will address the issue and compensate the affected users.