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Qadir AK
Qadir AK
Author
Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.
- Jan 30, 2024 10:25 UTC
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Binance Prepares for Stake Reduction in Gopax; Here’s Why
After initially acquiring Gopax, Binance plans to reduce its stake due to regulatory concerns in South Korea.
Binance wants to convert Gopax debt into equity and sell shares to address financial issues.
Despite regulatory hurdles and legal challenges, Binance remains interested in the South Korean crypto market.
In a significant move announced this Tuesday, Binance, a major player in the crypto world, is taking a step back from its involvement in Gopax, a South Korean-based company. This decision, following Binance’s acquisition of a majority stake in Gopax in February 2023, has sparked questions within the industry.
Understanding Binance’s Move
Binance, recognized as one of the largest global crypto exchange platforms, is changing course by opting to reduce its stake in Gopax. This decision aims to address concerns related to reporting requirements associated with Virtual Asset Business Operations [VASPs].
Steve Young Kim, Binance’s Asia-Pacific director, provided insight, stating that Gopax’s significant debt would be resolved through an equity-to-equity conversion.
“We expect that we will be able to provide more specific data on the sale of the shares in some form within a month or two.”
Counting Down to Disclosure
Binance has committed to revealing further details on its stake reduction with Gopax in the next two months. The crypto platform is strategizing to convert the debt, paid as GoFi repayment, into equity, thereby selling a portion of its stake to find a practical resolution to the ongoing issue.
Also Read: Binance vs SEC: Join Status Report Reveals Discovery Disputes
South Korea’s Allure
Following its exit in January 2021, Binance has been eager to re-enter the South Korean market. Recognizing South Korea as a pivotal hub for crypto exchange platforms, with substantial economic scalability and a thriving talent and startup community, Binance considers these factors as the driving force behind its venture into the region.
Did You Know? Bitcoin ETFs Coming to South Korea? Republic Officials Push for Reconsideration
Despite being on the cusp of finalizing the acquisition deal, Binance faced hurdles in the form of a lawsuit from the U.S. Securities and Exchange Commission (SEC). While Binance’s previous exits managed to find resolution, the current SEC lawsuit remains an unresolved challenge, creating uncertainty in the market.
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