Binance acquires majority stake in Korean crypto exchange GOPAX
Source:https://techcrunch.com/2023/02/06/binance-acquires-majority-stake-in-korean-crypto-exchange-gopax/ Binance acquires majority stake in Korean crypto exchange GOPAX 2023-02-06 21:54:31

Binance Holdings plans to return to South Korea after pulling out of the market in 2020. The world’s largest cryptocurrency trading platform by volume said it had acquired a majority stake in South Korea-based crypto exchange GOPAX

In November, GOPAX suspended customer withdrawals from its DeFi service, GoFi, after suffering effects from the bankrupt lender Genesis Global Trading, a Digital Currency Group (DCG) subsidiary. Genesis offered yields on crypto lending to GOPAX and DCG, which invested in GOPAX in April 2021 and is the second largest shareholder of GOPAX. In addition, GOPAX’s parent company, Streami, is one of the 10 largest creditors of Genesis. 

The new capital from Binance will enable GOPAX customers to make withdrawals and interest payments to normalize the Korean crypto trading platform. GOPAX had more than 600,000 users as of March 2021, per its website. 

Binance says its capital came from the Industry Recovery Initiative (IRI), a Binance-led co-investment project. Binance has set up IRI to protect users in the web3 industry and has committed $1 billion to the IRI project. Other firms in the web3 industry participated in the IRI project, including Jump Crypto, Polygon Ventures, Aptos Labs and Animoca Brands

“The Industry Recovery Initiative (IRI) was created to support promising companies that were negatively impacted by the events of last year,” Changpeng “CZ” Zhao, founder and CEO of Binance, said in its statement. “We hope that taking this step with GOPAX will further rebuild the Korean crypto and blockchain industry.” 

Binance did not disclose the stake size or deal valuation of the acquisition. Still, according to a local media outlet in January, Binance was in advanced talks to purchase a 41.2% stake in GOPAX from the company’s largest shareholder, GOPAX CEO Junhaeng Lee. 

GOPAX is one of the five cryptocurrency exchanges (Upbit, Bithumb, Coinone, Korbit and GOPAX) in South Korea. Upbit has the largest market share, with 76.6% in terms of traded value in 2021, followed by Bithumb and Coinone with 18.5% and 4.5%, respectively, per crypto research firm Xangle’s report

The latest acquisition comes nearly two months after Binance acquired Sakura Exchange BitCoin (SEBC) in Japan for an undisclosed amount as Binance eyes expanding its footprint in the East Asian market again.

Binance reentered Japan last year via the SEBC acquisition, two years after it paused its service in the Japanese market. Japan’s Financial Services Agency (FSA) issued warnings to Binance, which operated without proper registration and license, in 2018 and 2021. Binance said it “secured its first license in East Asia by acquiring SEBC.

Binance also said in its statement that it “is committed to collaborating with the South Korean regulators and virtual asset stakeholders to explore how Binance can leverage its technology and liquidity to support the local ecosystem.” 

South Korea is working to regulate the crypto sector to protect investors in the wake of a series of bankruptcies and accusations of fraud in the global web3 space last year; earlier this year, Japan also called for other countries to regulate crypto as strictly as banks.  

Binance has obtained regulatory approvals or authorizations in many countries, including Japan, France, Italy, Spain, Bahrain, Abu Dhabi, Dubai, New Zealand and more. 

Binance and GOPAX did not respond to TechCrunch’s request for further comment.

Science, Tech, Technology Source:https://techcrunch.com/2023/02/06/binance-acquires-majority-stake-in-korean-crypto-exchange-gopax/

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