HomeNewsSouth Korean Crypto Exchange Gopax to See Binance's Reduced Stake, Sources Claim

South Korean Crypto Exchange Gopax to See Binance’s Reduced Stake, Sources Claim

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  • Binance is considering selling its stake in South Korean crypto exchange Gopax to address the exchange’s liquidity and compliance challenges.
  • This move follows Binance’s acquisition of a significant stake in Gopax in early 2023, amid the latter’s liquidity issues.

Binance, a global leader in cryptocurrency exchanges, is reportedly in the early stages of discussions to reduce its stake in the South Korean crypto exchange Gopax. This strategic decision aims to tackle Gopax’s ongoing liquidity challenges, which have been intensified by the ripple effects of the FTX collapse, and to align with local regulatory compliance.

Addressing Liquidity and Compliance

Binance’s involvement with Gopax began in February 2023 when it acquired a 72.26% stake in the exchange. This acquisition was part of Binance’s initiative to alleviate Gopax’s liquidity issues, which were partly due to the troubles faced by Genesis Global Capital in the wake of FTX’s downfall.

Steve Kim, Binance’s Asia-Pacific BD director, revealed plans during a recent roundtable discussion. Binance intends to convert its loans to Gopax into equity and then sell these shares to other firms. This move is expected to ease Gopax’s debt burden and facilitate its financial normalization. Consequently, Binance would transition from the largest to the second-largest shareholder in Gopax.

Navigating Regulatory Hurdles

Gopax’s journey towards stabilization also involves regulatory compliance with South Korea’s Financial Services Commission (FSC). After Binance’s acquisition, Gopax applied for a change in its virtual asset service provider registration with the FSC. However, the approval process has been delayed for over a year, primarily due to concerns regarding Binance‚Äôs legal challenges in the United States.

Kim indicated that further details about this restructuring plan would be provided within two months. As of now, Binance has not given additional comments on this development.

In summary, Binance’s potential reduction in its stake in Gopax marks a significant strategic shift, aimed at resolving the liquidity issues of the South Korean exchange while navigating complex regulatory landscapes. This move highlights the intricate interplay between global crypto market dynamics and local regulatory frameworks.

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Bhushan Akolkar
Bhushan Akolkar
Bhushan is a FinTech enthusiast and possesses a strong aptitude for understanding financial markets. His interest in economics and finance has drawn his attention to the emerging Blockchain Technology and Cryptocurrency markets. He holds a Bachelor of Technology in Electrical, Electronics, and Communications Engineering. He is continually engaged in a learning process, keeping himself motivated by sharing his acquired knowledge. In his free time, he enjoys reading thriller fiction novels and occasionally explores his culinary skills. Business Email: info@ethnews.com Phone: +49 160 92211628