Binance cryptocurrency exchange is reportedly in the final stages of negotiations with the South Korean cloud service provider Megazone to sell a majority stake in the local exchange Gopax.
Binance is preparing to reduce its 72.6% stake in the Gopax exchange to as low as 10%, South Korea’s news agency The Chosun Ilbo reported on July 11.
Citing an anonymous industry insider related to Gopax, the report suggests that Binance is pushing the sale of Gopax shares to improve its governance structure as requested by local financial authorities.
Binance’s acquisition of Gopax was blocked by regulators
The news on Binance's expected Gopax share sale follows a series of reports on the company’s plans to reduce its stake in the South Korean exchange since it announced the acquisition in early 2023.
Binance announced the acquisition of a 72.26% stake in Gopax in February 2023, mentioning high ambitions to return to the South Korean market after wrapping multiple operations in the Asian country in 2021.
The capital injection was eventually blocked because the South Korean financial authorities opted to deny the change of the largest shareholder. Binance’s regulatory issues in the United States and a related lawsuit from the US Securities and Exchange Commission also contributed to more regulatory skepticism from South Korean authorities in 2023.
The new details on the sale come a few weeks before Gopax is expected to renew its real-name account contract with Jeonbuk Bank in August. Jeonbuk Bank and Gopax signed a two-year real-name account contract in August 2022. The contract reportedly expires on Aug. 11, 2024.
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Cointelegraph approached Binance for a comment regarding the sale of Gopax shares but did not receive a response at the time of publication.
Gopax was one of firms affected by the FTX contagion in 2022
Gopax was one of many firms in the crypto industry affected by the collapse of Sam Bankman-Fried’s FTX crypto exchange in November 2022. Just a few days after FTX collapsed, Gopax was forced to halt withdrawals of principal and interest payments in its decentralized finance service, which featured products from now-bankrupt crypto lending firm Genesis Global Capital.
Before the bankruptcy, Genesis’ parent company, Digital Currency Group, was reportedly Gopax’s second-largest shareholder and a key business partner, providing its GoFi product.
According to The Chosun Ilbo, Gopax’s total debt was 118.4 billion South Korean won ($86 million) as of April 2024.
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