Binance teams up with Lee Woong-yeol to launch crypto exchange
Binance is reportedly in talks with the former head of South Korea’s chemical and textile conglomerate Kolon Group to establish a new virtual asset exchange in the country.
Lee Woong-yeol, the honorary chairman of Kolon, is co-operating with other blockchain-native firms to build up the crypto trading platform that would cater to government and financial authorities. 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.
Kolon, a conglomerate with nearly 70 associated firms, has stakes in South Korean exchanges like Dunamu. That was part of its plan to achieve revenue of $2.6 billion by 2025.
According to Korean local news sources, the honorary chairman has shown interest in blockchain related business since he left amid an executive reshuffle back in 2018.
The news comes as part of Binance’s wider plans to return to South Korea after pulling out of the lucrative market in 2021. Preceding this alliance with Lee Woong-yeol, the world’s largest cryptocurrency trading platform acquired a majority stake in GOPAX.
The deal was funded by the Industry Recovery Initiative (IRI), which the exchange established in November to help reduce further cascading negative effects of FTX collapse. At the time, CEO CZ committed $1 billion to the fund at a public address, with an additional $1 billion to be added if the need arises.
Pending the official approval of Korean authorities, Binance is in the final steps to complete the transaction, which would allow it to operate once again in the South Korean crypto market.
The exact details weren’t disclosed, but according to a report by local media outlet Decenter Binance bought a 41.2% stake from CEO Lee Jun-haeng. The largest shareholder of Gopax will maintain the current representative system for the time being to ensure stable management.
The collapse of crypto exchange FTX has had an impact on South Korean exchanges, including GOPAX. The Seoul-based platform suspended payments in its DeFi service GOFi, which was introduced in partnership with crypto lender Genesis Global Capital.
CEO Changpeng Zhao revealed earlier in November that Binance is preparing to register under South Korean financial authorities by complying with local regulations. The exchange had previously opened a local office four years ago but had to cease its crypto trading services in December 2020.
Binance also discontinued global trading services for South Korean won in 2021 as local regulators banned foreign platforms from offering services to local residents.