Metaplanet aspires to acquisition of digital bank

SEC Lawsuit Stalls Binance’s Gopax Acquisition Deal in South KoreaNothing exists in a vacuum, and on that basis, it appears that ripples emanating from the recent lawsuit filed by the Securities and Exchange Commission (SEC) in the United States against global crypto exchange Binance have resulted in the company struggling to complete the acquisition of South Korea’s Gopax.Photo by Daniel Bernard on UnsplashSuspended pending reviewThe acquisition deal between Binance and South Korean crypto trading platform Gopax has hit a roadblock as a direct consequence of the lawsuit. The Financial Services Commission (FSC), the financial watchdog in South Korea, has put the acquisition on hold as it reviews the situation.Binance had acquired a majority stake in Gopax in February, with plans to re-enter the South Korean crypto market after a two-year absence. Gopax is a top five cryptocurrency exchange in South Korea, alongside Upbit, Bithumb, Coinone, and Korbit. However, according to a report by local news media, the FSC has suspended Gopax’s executive change report filed on Tuesday in light of the SEC lawsuit. The report outlined the nomination of three Binance members, including Leon Singh Poong, as inside directors of Gopax.The FSC cited the allegations of securities law violations against Binance and the SEC’s request to freeze Binance.US assets as the reasons for its cautious approach.Gopax revivalThe significance of Binance’s acquisition of Gopax goes beyond its re-entry into the South Korean market. It also aimed to revive the struggling local crypto trading platform. In November 2022, Gopax faced challenges when it suspended withdrawals of principal and interest payments from its decentralized finance service, GoFi, following the collapse of the Bahamas-based FTX crypto exchange and the bankruptcy of Genesis, a US digital assets financial services firm.Digital Currency Group, the parent company of Genesis, was reportedly the second-largest shareholder of Gopax and a key business partner providing the GoFi product. Binance’s acquisition deal intended to inject new capital into Gopax to facilitate customer withdrawals and interest payments for GoFi.The SEC lawsuit against Binance alleges the exchange’s commingling of customers’ funds and violations of various securities laws. The SEC has filed 13 charges against Binance, its subsidiaries, and its CEO, Changpeng Zhao.Acquisition strategyBinance appears to have been pursuing an acquisition strategy in attempting to carve out a greater market share in Asian markets. Binance entered the Japanese market via acquisition in November 2022 when it purchased local crypto platform, Sakura Exchange BitCoin. At the end of last month, Binance announced that it was rebranding the business as Binance Japan and launching it as a stand alone bespoke platform dedicated to the Japanese market.In Thailand, the global crypto exchange has varied its approach, entering into a joint venture rather than a full acquisition. It has partnered with Gulf Innova, with the new entity, Gulf Binance, recently having been awarded a trading license by the Thai regulator.The outcome of the SEC lawsuit and its impact on Binance’s operations in South Korea remains uncertain. The FSC’s review process will consider the allegations against Binance and the implications of the SEC’s actions before making a decision on the Gopax acquisition. The crypto industry will closely monitor the developments as they unfold, as no doubt the saga will have broader implications for Binance and its expansion plans.

Korea’s FSS to Collect Public Comments on Financial Statement Guidelines for Virtual Asset EntitiesThe South Korean Financial Supervisory Service (FSS) has revealed a set of exemplary financial statements aimed at clarifying the disclosure requirements of virtual asset-related entities. These guidelines have been designed to align with the Korean version of International Financial Reporting Standards (K-IFRS), which was established by the Korea Accounting Institute (KAI).It was reported earlier this month that the Financial Services Commission (FSC) brought forward these regulations to tackle accounting uncertainties within the blockchain industry.The main goal of these exemplary guidelines is to help entities provide financial statement readers with essential information regarding virtual assets. This includes details about the reserve amount held by virtual asset issuers and information about the virtual assets held by virtual asset service providers (VASPs).Photo by Kelly Sikkema on UnsplashPresentation sessionsTo ensure effective dissemination and understanding of these guidelines, the FSS, KAI, and the Korean Institute of Certified Public Accountants (KICPA) have planned presentation sessions. These sessions will take place from July 26 to August 11, which will involve visits to VASPs, listed companies, and accounting firms. Valuable feedback and suggestions from these stakeholders are anticipated, as the events encourage open two-way communication and welcome participation from anyone interested.Discussion meetingsTo further refine the ideas put forward during the presentation sessions, two separate discussion meetings with experts are scheduled for September and October. The recommendations gathered from the industry will undergo a careful review by experts and be thoughtfully incorporated into the guidelines.The FSS will finalize the guidelines in cooperation with the FSC, and the Securities and Futures Commission under the FSC will review them and give approval for their implementation. This is expected to take place between October and November.The FSC has stated that these exemplary guidelines are currently in their preliminary stage and open to potential changes during the public comment period. Additionally, companies have the flexibility to make necessary adjustments to these practice guidelines to suit their specific needs and requirements.Issuers, holders, exchangesThe exemplary practice guidelines are specifically targeted at three types of entities: virtual asset issuers, virtual asset holders, and virtual asset trading exchanges.For virtual asset issuers, providing essential information about their virtual assets is a key requirement. This information should encompass their business models, accounting policies, obligations (e.g. whitepapers), and the current status of their projects. Such details should be disclosed in the annotations of their financial statements. Furthermore, revenue generated from the sales of virtual assets must be recognized, and any changes to their obligations should be duly noted. Moreover, disclosure of the reserved amount of issued virtual assets and their intended usage plan is mandatory.Companies holding virtual assets must provide information regarding accounting policies, the total value of assets held, the reasons behind their holdings, and any gains or losses incurred. Additionally, holders are obligated to disclose risks associated with virtual assets and their potential impact.Virtual asset trading platforms, such as exchanges, are mandated to disclose not only their own virtual asset holdings but also those held on behalf of their customers. This disclosure should encompass detailed information about their accounting policies, the total value of assets under their custody, associated risks, and the involvement of third-party custodians. In particular, the platforms must indicate whether they treat customer assets under their custody as assets or liabilities and provide a clear rationale for such classification in the annotations of their financial statements.

American crypto exchange and custodian Gemini announced via its blog on Oct. 29 that it has been awarded in-principle approval for a Major Payment Institution (MPI) license from the Monetary Authority of Singapore (MAS). In an X post on Oct. 23, Dan Clarke, who worked for Gemini in Singapore in an International Marketing & Operations role in 2021, outlined that back then the company ran the first crypto-related full page ad in the Straits Times with the slogan “We’re in Singapore. For Good.” Fast forward three years and it appears that Gemini is making good on that commitment through this latest regulatory-compliant milestone.Photo by Swapnil Bapat on UnsplashSingapore to play a crucial roleThe MPI license will enable Gemini to offer digital payment tokens and cross-border money transfer services in Singapore. Gemini’s Asia-Pacific (APAC) business is headed up by Saad Ahmed. Ahmed commented that Singapore has been at “the heart” of its operational expansion within the APAC region. Expanding on that further, he stated:“While the United States remains our largest market and global headquarters, Asia and Singapore in particular play a crucial role in our global strategy.”  Ahmed outlined that Singapore represents the company’s second-largest market, with plans to double its current Singaporean workforce and move to a larger office space. The Gemini executive believes that this in-principle licensing approval takes the company one step closer to offering services that cater to the needs of residents of the city-state.  Serving users across the APAC regionIn its blog announcement, the firm said that “since establishing our regional headquarters in Singapore, we’ve focused on expanding our footprint, ensuring that we bring a localized, secure, and compliant trading experience to users across the region.” With the regulatory environment in its home market being currently hostile to crypto, Gemini has pursued a strategy followed by many of its peers in looking for growth opportunities overseas instead. In April of last year, the company announced that it was in the process of opening an engineering center in India.  In June 2023 the company publicized its intention to pursue a crypto trading license within the United Arab Emirates (UAE). At the time the company’s co-CEOs, Tyler and Cameron Winklevoss, referred to the “hostility and lack of clarity” when it came to the regulatory environment within the United States. Regulatory clarity to drive growthAhmed believes that regulatory clarity in Singapore will be a driver of growth, leading to greater adoption across the region. With regard to the U.S., he has the expectation that the crypto industry will grow regardless of whether former U.S. President Donald Trump or Vice President Kamala Harris wins the upcoming presidential election.  Notwithstanding that, Gemini’s Winklevoss twins have donated over $2 million to Trump’s campaign, while also contributing funds to a super political action committee (PAC) supporting John Deaton, a Republican challenger to the Senate seat of fierce crypto critic Senator Elizabeth Warren.  Regulatory conditions in Canada have proven to be too much to handle for the company. At the end of September, Gemini announced that it would close all customer accounts in Canada by December 31 as a direct consequence of new regulations which have been introduced by the Canadian Securities Administrators (CSA).