Points
- Binance is looking to reduce its 72.6% ownership in Gopax to around 10%.
- South Korean financial authorities requested improvements in
Binance Reportedly In Talks To Sell Majority Stake In South Korean Exchange Gopax
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Points
- Binance is looking to reduce its 72.6% ownership in Gopax to around 10%.
- South Korean financial authorities requested improvements in Gopax’s governance structure.
- The stake sale is critical as Gopax faces an August 11 deadline to renew its real-name account contract with Jeonbuk Bank.
- Binance’s acquisition of Gopax was initially blocked by South Korean regulators.
The global crypto exchange Binance 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% ownership in Gopax to around 10%, responding to requests from South Korean financial authorities to improve the exchange’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 term. 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 for the change in majority ownership, effectively blocking Binance’s capital injection into Gopax.
An unnamed industry insider told The Chosun Ilbo that Binance is pursuing the stake sale to meet regulatory requirements for governance improvements ahead of Gopax’s real-name account renewal. The source indicated a deal could be finalized this month.
The regulatory hurdles have left Gopax in a precarious financial position. As of April 2024, Gopax reportedly 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, securing the real-name account renewal is critical to maintaining its status as a won-based cryptocurrency exchange in South Korea. The stake sale to Megazone, if approved, could pave the way for new capital investment and regulatory approval needed to shore up Gopax’s finances and operations.