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Binance Plans to Reduce Stake in Gopax to Solve Debt Issues

TraderKnows
TraderKnows
02-02

Binance is considering reducing its shares in the South Korean digital asset exchange, Gopax.

According to multiple sources, Binance, the world's leading cryptocurrency exchange, is considering selling part of its stake in South Korean digital asset exchange Gopax. Binance is expected to announce its specific divestment plan in the next one to two months.

This divestment plan aims to address Gopax's debt issues and ensure its compliance with local regulatory requirements. Binance plans to reveal detailed information about the reduction of its Gopax shares in the next two months, and this equity transfer is expected to alleviate Gopax's financial pressure to some extent.

Steve Young Kim, Binance's Director for the Asia Pacific region, stated that Binance plans to convert its loans to Gopax into equity and then sell these shares to other companies. The purpose of this strategy is to help Gopax update its registration with the Financial Services Commission (FSC) and alleviate its current financial difficulties.

Binance will move from being Gopax's largest shareholder to the second largest. In December last year, Gopax announced it was in the final stages of normalizing its funds to address the deposits lost in the Genesis Global Capital event.

Moreover, since exiting the Korean market in January 2021, Binance has been eager to re-enter, viewing it as a key hub for cryptocurrency trading platforms. The Korean market is known for its vast economic scalability and vibrant talent and entrepreneurial community, which has made Binance decide to re-enter the region.

Binance acquired a majority stake in Gopax in February 2023 as part of its re-entry into the Korean market. However, due to legal issues Binance faces in the United States, the FSC's approval process for its registration change has been delayed for over a year.

Considering the development of the cryptocurrency market and changes in the regulatory environment, Binance's move could become a case of interest for other cryptocurrency businesses looking to expand globally.

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