July 18, 2024
1 Solar System Way, Planet Earth, USA
Crypto

Binance is reportedly in talks to sell a majority stake in South Korean exchange Gopax

Key points

  • Binance plans to reduce its stake in Gopax from 72.6% to 10%.
  • The stake sale is a response to demands from South Korean regulators for a more streamlined governance structure.

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According to a report on July 11, Binance is in final talks to sell a majority stake in South Korean cryptocurrency exchange Gopax to local cloud services provider Megazone. report from the Chosun Ilbo.

The global cryptocurrency exchange is seeking to reduce its 72.6% stake in Gopax to around 10% in response to requests from South Korean financial authorities to improve the platform’s governance structure. The stake sale comes as Gopax faces an August 11 deadline to renew its real-name account contract with Jeonbuk Bank, which was initially signed in August 2022 for a two-year period.

Binance acquired its controlling stake in Gopax in February 2023 as part of efforts to re-enter the South Korean market after ceasing multiple operations there in 2021. However, South Korean regulators have so far denied approval of the change in majority ownership, effectively blocking Binance’s capital injection into Gopax.

An anonymous industry source told The Chosun Ilbo that Binance is seeking a share sale to meet regulatory requirements for governance improvements ahead of the renewal of Gopax’s real-name account. The source indicated that a deal could be finalized this month.

Regulatory hurdles have left Gopax in a difficult position. precarious financial situationAs of April 2024, Gopax had total liabilities of 118.4 billion won ($91.5 million). This includes 63.7 billion won in unpaid debts to users of its GOFI product and a 36.4 billion won loan from Binance intended to help repay those users.

For Gopax, getting the real-name account renewal is critical to maintaining its status as a won-based cryptocurrency exchange in South Korea. The sale of the stake to Megazone, if approved, could pave the way for further capital investments and regulatory approval needed to shore up Gopax’s finances and operations.

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