The Stake That Binance Holds in the South Korean Digital Asset Exchange GOPAX Will Be Reduced

The well-known cryptocurrency exchange Binance is making efforts to reduce its controlling position in GOPAX, a South Korean electronic asset exchange.

Recent reports from local media sites indicate that Binance is considering selling some of its outstanding shares. The exchange will announce modifications in the regulatory framework for Virtual Asset Service Providers (VASPs) in South Korea in the coming months and attribute its decision to these modifications.

“We are committed to further decreasing our ownership in GOPAX in order to address the matter of reporting modifications to virtual asset business operators (VASPs).” We will provide more specific information regarding the sale of shares in the coming weeks.

Binance May Leave the South Korean Market Again

In light of the constantly shifting regulatory landscape, the exchange can decide to reduce the scope of its operations in the South Korean market. After leaving South Korea for the second time two years ago, it is highly shocking that Binance may be departing the country once more. This comes only a year after the company returned to the market with GOPAX.

In January 2023, as part of its Industry Recovery Initiative, Binance invested in GOPAX, becoming the company’s majority shareholder.

A cryptocurrency exchange in South Korea, GOPAX, has received an investment from #Binance as part of our Industry Recovery Initiative.
 
We are committed to collaborating with GOPAX and South Korean regulators to enhance user protection standards in the country and promote user education through @BinanceAcademy.

— Binance

A new version of the report on directors and other corporate structures was given to the authorities in charge of financial matters in March following the conclusion of successful negotiations. The approval procedure, on the other hand, has been delayed because of the possibility of legal complications.

At the moment, Binance is contemplating a plan that might involve reducing the number of shares it holds in the company or even selling all of its shares. To do this, the monies that were invested in the company will be converted into stock payments from GoFi, and the company will sell its stake in order to address the VaSP reporting difficulties.

Steve Young Kim, the Director of the Asia-Pacific area for Binance, has said that it is anticipated that GOPAX’s large debt will be resolved through a conversion of equity to equity. In relation to the reporting system, he noted that Binance intends to reduce its ownership in the future and is dedicated to working together with authorities to fix any outstanding issues.

A Rescue of GOPAX by Binance in the Year 2023

GOPAX was experiencing financial difficulties, so the company decided to suspend transactions processed via its decentralized financial (DeFi) network, GoFi. In accordance with the agreement’s terms, Binance has pledged to supply the funds required to satisfy any withdrawal requests, staked savings, and interest payments.

The previous Chief Executive Officer of Binance, Changpeng Zhao, brought attention to the fact that the exchange carries out the significant responsibility of assisting new enterprises through its Recovery Initiative. According to CZ, the efforts that are being made to save the South Korean exchange would invigorate the country’s tourism sector.

There will be strong collaboration between Binance and GOPAX in order to improve user education and raise knowledge about blockchain technology. This goal will be accomplished through the utilization of Binance Academy, which is a learning platform that is openly available and devoted to the study of blockchain technology and cryptocurrency, providing a wide variety of educational resources.

In recent times, the exchange has been confronted with regulatory constraints that have caused it to either entirely withdraw from various markets or declare partial withdrawals by investing in local subsidiaries.

Due to regulatory concerns, the company chose to exit the Russian market during the previous year. Additionally, they left the Japanese market between 2018 and 2021 for reasons comparable to those mentioned above; however, they have already made a comeback with the relaunch of Binance Japan in 2023.