Binance is facing renewed scrutiny from South Korean lawmakers after a parliamentary hearing this week reignited calls for the exchange to compensate victims of GOPAX’s failed GoFi deposit program.
Summary
- Rep. Min Byung-dug of South Korea’s ruling party questioned regulators about Binance’s unfulfilled pledge to repay GoFi investors.
- Lawmakers criticized the approval of the GOPAX acquisition without a clear compensation plan.
- Around 3,000 investors are still locked out of $106 million in frozen funds since the 2022 FTX collapse.
South Korean lawmakers are intensifying pressure on Binance to fulfill a reported promise to compensate investors of GoFi, a yield-generating product offered by local crypto exchange GOPAX. According to local sources, Rep. Min Byung-dug of the ruling Democratic Party of Korea directly questioned Financial Services Commission Chairman Lee Eog-won during a National Policy Committee hearing, asking why Binance’s acquisition of GOPAX was approved without a clear repayment plan in place.
“This is a merger not backed by capital,” Min asserted, implying that Binance may have secured GOPAX through influence or promises rather than through substantial financial commitments. He futher emphasized that full compensation to GoFi victims was a core condition tied to Binance’s acquisition of GOPAX, yet no concrete repayment roadmap has been presented to date.
Byung-dug’s comments echoed growing frustration among nearly 3,000 GoFi users whose funds, totaling $106 million, remain stuck. The assets were tied to Genesis Global Capital, a key lending partner of GOPAX’s GoFi yield program, which suspended withdrawals following the market turmoil triggered by the collapse of FTX.
When Genesis halted redemptions, GOPAX’s GoFi accounts became locked, leaving investors unable to access their deposits. According to a GOPAX creditor, victims are still waiting for a clear timeline or official response.
Meanwhile, GOPAX has maintained that it is committed to protecting users’ assets and fulfilling compensation obligations, adding that it will give details on timeline and process once they reach an agreement.
Binance’s next move could set market precedent
The renewed scrutiny comes after Binance finally completed its long-delayed acquisition of GOPAX earlier this month, clearing regulatory hurdles that had stalled the deal for over two years. The exchange initially agreed to acquire the South Korean exchange in early 2023 as part of a regional expansion plan. However, the Korea Financial Intelligence Unit (KoFIU) had blocked the acquisition, citing its past regulatory violations in the US, France, and India.
Approval was only granted after Binance reportedly resolved compliance issues with US authorities. Lawmakers now argue that the deal should have required immediate compensation of GoFi users as a condition for finalization.
Notably, Binance has previously compensated users in times of crisis. In October, the exchange reimbursed approximately $283 million to users impacted by a sudden market crash and token de-pegging event.
As calls for accountability mount, the exchange’s response to the situation could set a precedent for how global crypto firms handle user protections after mergers. A timely and transparent resolution may help rebuild trust while inaction risks triggering further regulatory blowback in one of Asia’s most active crypto markets.
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