Binance Seeks to Reduce its Stake in the South Korean Exchange GOPAX

By AZC News | An hour ago

Binance Exchange is exploring options to divest part of its previous investment in GOPAX due to legal concerns raised by South Korean regulatory authorities.Binance Seeks to Reduce its Stake in the South Korean Exchange GOPAX

According to CoinDesk, Binance is currently in discussions to reduce its stake "within the next 1-2 months" in the South Korean cryptocurrency exchange GOPAX to address liquidity concerns following the collapse of FTX and concerns about compliance with local regulations.

Steve Kim, Binance's Director of Business Development for the Asia-Pacific region, stated that Binance aims to convert its loans to GOPAX into equity and then sell shares to other companies. This move is intended to alleviate debt issues within GOPAX. As a result, Binance, currently the largest shareholder, would drop to the second-largest position.

As previously reported, Binance acquired a significant stake in the GOPAX crypto exchange in February 2023, after the Korean exchange's parent company, Streami Inc, faced liquidity issues related to the bankruptcy of Genesis Global Capital, a lending platform, in January 2023. Genesis Global Capital was responsible for managing GOPAX's deposits.

The GoFi product was designed to generate profits for users who entrusted their digital assets to GOPAX. Since November 2022, GOPAX had temporarily suspended withdrawals of principal and interest from the GoFi service due to FTX's bankruptcy. Furthermore, Genesis's parent company, Digital Currency Group (DCG), is believed to be the second-largest shareholder in GOPAX and a key partner providing the GoFi product.

Binance is presumed to have intervened to inject capital into GOPAX to quickly resume withdrawal operations for customers. In exchange, Binance would own 72.26% of the South Korean exchange.

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Reasons for Binance Reducing its Stake in GOPAX.