Binance seemingly forced to cut stake in South Korean exchange GOPAX

abdelaziz Fathi

Binance, the world’s largest cryptocurrency exchange by trading volume, is set to decrease its stake in the South Korean crypto exchange GOPAX.

This move comes as part of Binance’s efforts to stay compliant with digital-asset reporting requirements and address regulatory concerns in South Korea. Details of Binance’s stake reduction in GOPAX are expected to be disclosed within the next couple of months.

In February 2023, Binance purchased the equity stake from Gopax’s largest shareholder, Lee Jun-hang, marking its re-entry into the South Korean market after a two-year absence. Pending the official approval of Korean authorities, Binance was reportedly in the final steps to complete the transaction, which would allow it to operate once again in the local crypto market.

However, following a debt-equity swap, Binance’s stake in GOPAX may have risen to around 80%. According to Steve Young Kim, Binance’s Asia-Pacific director, the company is now in the early stages of discussions to sell off a portion of its stake, as reported by News1.

Binance had submitted the so-called ‘executive change report’ as part of the due diligence requirements to buy a controlling share in Gopax. The report sought the appointment of three Binance executives as inside directors as part of ownership transfer.

GOPAX, one of the five fully registered crypto exchanges in South Korea, faced liquidity challenges following the FTX collapse. The Seoul-based platform suspended payments in its DeFi service GOFi, which was introduced in partnership with crypto lender Genesis Global Capital. But Binance’s intervention in February 2023, which involved acquiring a 72.26% stake in GOPAX, helped resolve these liquidity problems.

Steve Kim explained that Binance’s strategy involves converting its loans to GOPAX into equity and then selling these shares to other firms. This approach is said to alleviate GOPAX’s debt issues and enable Binance to transition from the largest to the second-largest shareholder.

In December, GOPAX revealed progress in securing funds to normalize its operations and restore lost deposits. The revised plan was expected to help GOPAX renew its registration with the Financial Services Commission (FSC) in South Korea. However, the FSC has delayed approving GOPAX’s registration change for over a year due to concerns related to Binance’s legal challenges in the US.

South Korean authorities apply strict new rules to crypto businesses to minimize the risks of money laundering and market manipulation, which went into full effect last year.

  • Read this next

    Digital Assets

    Bitcoin breaks all records with a massive $1.347 billion transaction

    This transaction has surpassed previous records, setting a new benchmark for Bitcoin trades. Before this event, the largest Bitcoin transactions included a $1.1 billion trade in April 2020 involving 161,500 BTC, and other significant transactions ranging from $491 million to $1.033 billion throughout 2019 and 2020.

    Digital Assets

    Uniswap debuts Ethereum ‘uni.eth’ subdomains

    Decentralized exchange platform Uniswap has integrated Ethereum Name Service (ENS), allowing users to create human-readable domain names and cryptocurrency wallet addresses using .eth endings.

    Web3

    Magic Square Expands with TruePNL Acquisition

    Binance’s web3 app store, Magic Square, acquired token platform TruePNL in a cash deal this week for an undisclosed sum. The deal brings TruePNL’s infrastructure (excluding branding & token) under Magic Square’s wing. Initially seeking a partnership, Magic Square opted for a full acquisition.

    Crypto Insider

    The Future of Prediction Markets? Zeitgeist Launches Decentralized Court System

    Polkadot-powered prediction market protocol Zeitgeist has announced the launch of its latest innovation: a decentralized court system.

    Digital Assets

    Crypto exchange Kraken fires back at SEC lawsuit, claiming overreach

    Crypto exchange Kraken is pushing back against the U.S. Securities and Exchange Commission (SEC), seeking to toss out a lawsuit that accused the platform of operating without proper registration.

    Industry News

    Exness Named a Best Place to Work in 2024

     Global leader Exness, tops in retail trading volume, earns 2024 “Best Place to Work” award, cementing its employee-centric culture after three prior years of winning the Cyprus national title.

    Digital Assets

    Swan Bitcoin taps Bakkt for crypto offering in the US

    “We are thrilled to be taking this exciting step forward in our partnership with Swan. This is just the beginning of our collaboration, as we intend to explore further growth opportunities together in the future, including expansion into international markets.”

    Digital Assets

    Polkadot Awards Bifrost a 500,000 DOT Loan to Enhance Liquid Staking Adoption

    Bifrost, a leader in liquid staking solutions, has secured a 500,000 DOT loan from Polkadot’s treasury to expand the reach and utility of its vDOT product within the ecosystem.

    Digital Assets

    FTX cleared to sell $1 billion stake in AI outfit Anthropic

    A Delaware bankruptcy court just approved a plan allowing the now-defunct FTX and its creditors to offload the exchange’s $1 billion stake in AI outfit Anthropic.

    <