Binance plans to reduce its majority stake in South Korean crypto exchange Gopax to address regulatory compliance issues following its acquisition in early 2023.
Binance, the world’s largest crypto exchange, plans to reduce its shareholding at Gopax, one of the largest crypto exchanges in South Korea. This decision comes in response to the regulatory challenges faced by Binance in South Korea, particularly from the Financial Services Commission (FSC) and the US Securities and Exchange Commission (SEC). Binance’s share reduction is expected to occur in the next two months.
In February 2023, Binance acquired a majority stake in Gopax as part of its strategy to re-enter the South Korean market. However, the move led to complications with the FSC and the SEC, which necessitated a reduction in stakes. The downsizing plan involves converting a loan paid to pay off GoFi into equity and then selling a portion of the stake. This approach is intended to resolve Gopax’s debt and regulatory compliance issues.
Binance’s involvement in Gopax follows reports that Gopax’s parent company, Streami Inc., is among the largest creditors of failed crypto lender Genesis Global. In addition, Digital Currency Group, the parent company of Genesis Global, was the second largest shareholder in Gopax. Binance’s decision to reduce its stake in Gopax is seen as a preemptive measure to address the lack of clear guidelines for reporting new virtual assets and to facilitate dialogue with financial authorities.
In addition to dealing with regulatory issues, Binance’s reduction in Gopax’s stake is in line with its broader strategy to expand its presence in Asia. Despite the reduction, Binance is expected to retain a significant stake in Gopax, maintaining its influence in the South Korean crypto market.
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