Binance Holdings intends to return To South Korea after leaving the market in 2021. The world's largest cryptocurrency trading platform has announced the acquisition of a majority stake in the South Korean cryptocurrency exchange GOPAX.
In November, GOPAX stopped removing customers from its GoFi DeFi service after Genesis Global Trading , a subsidiary of Digital Currency Group (DCG) , faced bankruptcy. Genesis offered GOPAX income from crypto loans, and DCG, which invested in GOPAX in April 2021, is GOPAX's second largest shareholder. In addition, GOPAX's parent company, Streami, is one of the top 10 lenders to Genesis.
The new Binance capital will allow GOPAX customers to withdraw funds and pay interest to normalize the Korean cryptocurrency trading platform. According to the GOPAX website, as of March 2021, GOPAX has over 600,000 users. A Binance spokesperson told TechCrunch that Binance also plans to offer Binance Academy, a blockchain and cryptocurrency education platform, to increase GOPAX users' awareness of blockchain, cryptocurrency and web3.
Binance says its capital came from the Industrial Recovery Initiative (IRI) co-investment program led by Binance. Binance created IRI to protect users in the web3 industry and has committed $1 billion to the IRI project. Other companies in the web3 industry also participated in the IRI project, including Jump Crypto, Polygon Ventures, Aptos Labs, and Animoca Brands.
“The Industry Recovery Initiative (IRI) was created to support promising companies that were negatively impacted by the events of the past year,” Binance founder and CEO Changpeng “CZ” Zhao said in a statement. “We hope this move with GOPAX will lead to further recovery for the Korean cryptocurrency and blockchain industry.”
Binance did not disclose the size of the stake or the valuation of the purchase. However, according to local media reports in January, Binance was in preliminary talks to acquire a 41.2% stake in GOPAX from the company's largest shareholder, GOPAX CEO Junhyun Li.
GOPAX is one of the five cryptocurrency exchanges in South Korea (Upbit, Bithumb, Coinone, Korbit and GOPAX). Upbit has the largest market share with 76.6% of trading value in 2021, followed by Bithumb and Coinone with 18.5% and 4.5% respectively, according to a report from cryptocurrency research firm Xangle .
The latest acquisition comes almost two months after Binance acquired Japan's Sakura Exchange BitCoin (SEBC) for an undisclosed amount as Binance plans to re-expand its presence in the East Asian market.
Binance re-entered the Japanese market with the acquisition of SEBC last year, two years after it ceased operations in the Japanese market. The Japan Financial Services Agency (FSA) issued a warning to Binance in 2018 and 2021 for operating without proper registration and license. Binance announced that it has “acquired SEBC, its first license in East Asia.
Binance also said in a statement that it is “committed to working with South Korean regulators and virtual asset stakeholders to explore how Binance can leverage technology and liquidity to support the local ecosystem.” A Binance spokesperson did not provide further details on ongoing licensing and registration negotiations in South Korea.
South Korea is trying to regulate the cryptocurrency sector to protect investors after a series of bankruptcies and fraud allegations in the global web3 space last year . Earlier this year, Japan also urged other countries to regulate cryptocurrencies as strictly as banks.
Binance is available in Japan, France, Italy, Spain, Bahrain, Abu Dhabi, Dubai, New Zealand and more. received regulatory approval or approval in many countries, including
GOPAX did not respond to a TechCrunch request for further comment.
(Updates with comments from Binance in the third and tenth paragraphs).