Following its exit from the South Korean market in 2020, Binance Holdings intends to go back there. The majority share in the South Korean-based cryptocurrency exchange GOPAX has been acquired, according to the largest cryptocurrency trading platform in the world by volume.
After experiencing consequences from the insolvent lender Genesis Global Trading, a division of the Digital Currency Group (DCG), GOPAX banned customer withdrawals from their DeFi service, GoFi, in November. GOPAX and DCG, which invested in GOPAX in April 2021 and is GOPAX’s second-largest stakeholder, received yields on crypto financing from Genesis. Additionally, one of the top ten debtors of Genesis is Streami, the parent firm of GOPAX.
In order to stabilize the Korean cryptocurrency trading platform, the new funds from Binance will allow GOPAX users to make withdrawals and interest payments. According to its website, GOPAX had more than 600,000 users as of March 2021.
According to Binance, The Industry Recovery Initiative (IRI), a co-investment effort launched by Binance, is where its funding originated. With a $1 billion investment, Binance has created IRI to safeguard users in the web3 sector. Participating companies from the web3 sector included Jump Crypto, Polygon Ventures, Aptos Labs, and Animoca Brands.
According to Changpeng “CZ” Zhao, founder and CEO of Binance, The Industry Recovery Initiative (IRI) was developed to support potential businesses that were adversely damaged by the events of last year. It expects that taking this action with GOPAX will help the Korean cryptocurrency and blockchain industry to further recover.
The size of the stake or the deal valuation for the acquisition was not made public by Binance. However, a local media site reported in January that Binance was in advanced negotiations to buy a 41.2% stake in GOPAX from GOPAX CEO Junhaeng Lee, the company’s largest stakeholder.
In South Korea, there are five exchanges for cryptocurrencies: Upbit, Bithumb, Coinone, Korbit, and GOPAX. According to a survey by the cryptocurrency research company Xangle, Upbit has the greatest market share with 76.6% of the traded value in 2021, followed by Bithumb and Coinone with 18.5% and 4.5%, respectively.
Binance made its previous acquisition of Sakura Exchange BitCoin (SEBC) in Japan for an unknown sum about two months ago. With this current acquisition, Binance hopes to once more increase its presence in the East Asian market.
Two years after pausing its operations in the Japanese market, Binance reentered the country last year through the acquisition of SEBC. Binance, which operated without the required registration and authorization, received warnings from Japan’s Financial Services Agency (FSA) in 2018 and 2021. By purchasing SEBC, Binance claimed to have acquired its first license in East Asia.
Additionally, Binance stated in its statement that it is dedicated to working with South Korean regulators and virtual asset players to investigate how Binance can utilize its technology and liquidity to benefit the local ecosystem.
In response to many bankruptcies and allegations of fraud in the worldwide web3 area last year, South Korea is attempting to regulate the cryptocurrency industry to protect investors. Earlier this year, Japan also asked on other nations to regulate crypto as tightly as banks.
In numerous nations, including Japan, France, Italy, Spain, Bahrain, Abu Dhabi, Dubai, New Zealand, and others, Binance has gained regulatory certifications or authorizations.
