Binance will be re-entering the South Korean crypto market by putting capital into the survival of GOPAX.
Binance returns to South Korea after nearly two years following the purchase of a majority stake in South Korean cryptocurrency exchange GOPAX. The purchase is a part of Binance’s strategy to expand its global presence and to tap further into the growing Asian market.
The acquisition will help Binance to increase its market share and customer base, offer a wider range of services and products, and improve its operational efficiency. Additionally, the acquisition was a good fit for Binance as GOPAX had a strong regulatory compliance track record and a secure platform, making it an attractive acquisition target.
Funding of the purchase came from a Binance-led co-investment project called the Industry Recovery Initiative, to which Binance pledged $1 billion.
In a blog post dated November 16, 2022, GOPAX shared that it was in constant communication with Digital Currency Group (DCG), who is GOPAX’s second-largest shareholder, regarding reimbursement of assets to protect those of its customers. Meanwhile, GOPAX’s parent company Streami Inc. is listed as one of the largest known creditors of bankrupt Genesis Global — a subsidiary of DCG.
Binance plans to inject capital into GOPAX to ensure that customers can make withdrawals and interest payments for GOPAX’s yield product GoFi.
South Korean crypto industry suffered greatly from the implosion of TerraUSD last year. As a result, a large number of South Korean investors lost their money, and with founder Do Kwon’s disappearance, a chance of reimbursement isn’t possible. The story tarnished the entire digital–asset industry. “We hope that taking this step with GOPAX will further rebuild the Korean crypto and blockchain industry,” said founder and chief executive of Binance, Changpeng Zhao.