Binance has reportedly finalized a deal to buy a 41.2% majority stake in South Korea’s Gopax cryptocurrency exchange. The world’s largest cryptocurrency exchange has bought the stake from Lee Jun-hang, CEO, Gopax. Lee Jun-hang is Gopax’s largest shareholder.
The said acquisition purchase is reportedly made possible via Binance’s $1 billion Industry Recover Initiative (IRI). The IRI is Binance’s co-investment project.
One among the top five cryptocurrency exchanges in South Korea, in 2022, Gopax considerably expanded its business in the local Korean market. But Gopax also reportedly encountered a liquidity crunch following the FTX debacle.
Yibo Ling, chief business officer, Binance, states the Gopax acquisition would involve Binance investing capital into Gopax to restart its yield product customers’ withdrawals and interest payments. Ling says,
The fundamental thrust of this deal was to support customers and make sure that any customer who wants to withdraw their assets has the ability to do so.
The Binance stake buying deal is anticipated to mitigate Gopax’s liquidity crisis. It would also reportedly allow Binance to enter the South Korean cryptocurrency market. Binance’s efforts to venture into the South Korean cryptocurrency industry have been apparent in the past. But these efforts have not reportedly succeeded owing to regulatory pressures.
The Binance-Gopax stake deal was originally supposed to go live in late 2022, per reports. But negotiations on the stake value also postponed the announcement. The Gopax stake buying deal follows Binance.US’ deal to buy the bankrupt crypto exchange Voyager Digital’s assets for $1.02 billion.
In July 2022, Voyager filed for bankruptcy following a loan default by Three Arrows Capital (a cryptocurrency hedge fund). The Gopax-Binance deal would involve Binance.US to make a deposit of $10 million to reimburse some of the Voyager expenses by up to $15 million.