South Korean Financial Regulators Request Gopax to Conduct Risk Assessment

04/24/2023 06:07 • Blockchain Briefs • 77 views

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

The South Korean financial regulatory authorities have requested the South Korean exchange Gopax to conduct a risk assessment again after 9 months. The exchange must undergo the reassessment to ensure that it complies with current regulations and is operating securely. This request comes amid the ongoing investigation into virtual asset operators (VASPs) by the Financial Services Commission (FSC).

The Background

Gopax is a South Korean exchange that provides cryptocurrency trading services to users. In 2020, the exchange was acquired by Coin An, another South Korean VASP. During this acquisition, Gopax had to submit a change report to the FSC, informing them of the change in ownership.
The FSC has been conducting reviews of VASPs to ensure that they are following the latest regulatory guidelines. The reviews are especially important as South Korea is known for its strict regulations on the cryptocurrency industry.

The Delay in Reviewing the Change Report

The financial authorities are currently reviewing the change report submitted by Gopax during its acquisition by Coin An. The review results were expected to be released in April; however, they have been postponed until mid-May. This delay could further push back the repayment of funds to users who bound their funds in GoFi, Gopax’s cryptocurrency deposit service.
In order for Coin An to fully acquire Gopax, the change report needs to be approved. Only after completing the acquisition process can Coin An pay the costs associated with acquiring Gopax and return the bound customer funds worth 56.6 billion South Korean won (approximately $42.39 million).

The Impact on Users

The delay in reviewing the change report could be detrimental to users who have bound their funds in GoFi. The customers who bound their funds will not be able to access them until the review is completed and Coin An has paid the acquisition costs.
Moreover, the process of assessing the risks associated with Gopax could lead to tighter regulation and possibly stricter controls. This could lead to a decrease in the number of users on Gopax and other exchanges facing similar scrutiny.

Conclusion

In conclusion, the recent request by South Korean financial regulatory authorities for the South Korean exchange Gopax to conduct a risk assessment again after 9 months highlights the concerns around VASPs and their compliance with strict regulatory guidelines. The delay in reviewing the change report submitted by Gopax during its acquisition by Coin An highlights the need for quick regulatory reviews to ensure that customers’ funds are not left in limbo.

FAQs

Q: What is a VASP?
A: A VASP is a virtual asset service provider that provides cryptocurrency-related services to users.
Q: Is Gopax the only exchange being scrutinized by the South Korean authorities?
A: No, the South Korean authorities are conducting reviews on all VASPs, including exchanges like Gopax.
Q: What could be the impact of tighter regulation on VASPs?
A: Tighter regulation could lead to a decrease in the number of users on VASPs, which could ultimately impact the exchange’s business model and profitability.

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