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.
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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.
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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.