Binance Seeks to Reduce its Stake in the South Korean Exchange GOPAX
Binance Seeks to Reduce its Stake in the South Korean Exchange GOPAX
By AZC News | Feb 01 2024
According to CoinDesk, Binance is currently in discussions to reduce its stake "within the next 1-2 months" in the South Korean cryptocurrency exchange GOPAX to address liquidity concerns following the collapse of FTX and concerns about compliance with local regulations.
As previously reported, Binance acquired a significant stake in the GOPAX crypto exchange in February 2023, after the Korean exchange's parent company, Streami Inc, faced liquidity issues related to the bankruptcy of Genesis Global Capital, a lending platform, in January 2023. Genesis Global Capital was responsible for managing GOPAX's deposits.
The GoFi product was designed to generate profits for users who entrusted their digital assets to GOPAX. Since November 2022, GOPAX had temporarily suspended withdrawals of principal and interest from the GoFi service due to FTX's bankruptcy. Furthermore, Genesis's parent company, Digital Currency Group (DCG), is believed to be the second-largest shareholder in GOPAX and a key partner providing the GoFi product.
Binance is presumed to have intervened to inject capital into GOPAX to quickly resume withdrawal operations for customers. In exchange, Binance would own 72.26% of the South Korean exchange.
Related: Binance and Gulf Energy Launch Crypto Exchange in Thailand
Reasons for Binance Reducing its Stake in GOPAX
Binance's foray into the South Korean market through GOPAX has faced numerous legal hurdles, primarily due to regulatory issues with the Financial Services Commission (FSC) of South Korea. These challenges stem from Binance's troubles with the U.S. Securities and Exchange Commission (SEC), including allegations of violating the Commodity Futures Trading Commission's (CFTC) derivatives trading regulations and accusations of mingling customer funds, as reported by Reuters.
Furthermore, the FSC recently proposed new regulations to enhance consumer protection and provide a legal framework for measures, including criminal penalties. They have mandated that crypto companies disclose the assets they hold in financial reports, and exchanges must establish reserve funds with at least 3 billion won in bank accounts.
The proactive regulatory measures by South Korean lawmakers are grounded in the fact that the country's residents hold up to $98.5 billion worth of various crypto assets. This inadvertently increases concerns about Binance's legal standing and contributes to the decision to divest ownership.
Disclaimer. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own researBinance Seeks to Reduce its Stake in the South Korean Exchange GOPAX
By AZC News | Feb 01 2024
Binance Exchange is exploring options to divest part of its previous investment in GOPAX due to legal concerns raised by South Korean regulatory authorities.Binance Seeks to Reduce its Stake in the South Korean Exchange GOPAX
According to CoinDesk, Binance is currently in discussions to reduce its stake "within the next 1-2 months" in the South Korean cryptocurrency exchange GOPAX to address liquidity concerns following the collapse of FTX and concerns about compliance with local regulations.
Steve Kim, Binance's Director of Business Development for the Asia-Pacific region, stated that Binance aims to convert its loans to GOPAX into equity and then sell shares to other companies. This move is intended to alleviate debt issues within GOPAX. As a result, Binance, currently the largest shareholder, would drop to the second-largest position.
As previously reported, Binance acquired a significant stake in the GOPAX crypto exchange in February 2023, after the Korean exchange's parent company, Streami Inc, faced liquidity issues related to the bankruptcy of Genesis Global Capital, a lending platform, in January 2023. Genesis Global Capital was responsible for managing GOPAX's deposits.
The GoFi product was designed to generate profits for users who entrusted their digital assets to GOPAX. Since November 2022, GOPAX had temporarily suspended withdrawals of principal and interest from the GoFi service due to FTX's bankruptcy. Furthermore, Genesis's parent company, Digital Currency Group (DCG), is believed to be the second-largest shareholder in GOPAX and a key partner providing the GoFi product.
Binance is presumed to have intervened to inject capital into GOPAX to quickly resume withdrawal operations for customers. In exchange, Binance would own 72.26% of the South Korean exchange.
Related: Binance and Gulf Energy Launch Crypto Exchange in Thailand
Reasons for Binance Reducing its Stake in GOPAX
Binance's foray into the South Korean market through GOPAX has faced numerous legal hurdles, primarily due to regulatory issues with the Financial Services Commission (FSC) of South Korea. These challenges stem from Binance's troubles with the U.S. Securities and Exchange Commission (SEC), including allegations of violating the Commodity Futures Trading Commission's (CFTC) derivatives trading regulations and accusations of mingling customer funds, as reported by Reuters.
Furthermore, the FSC recently proposed new regulations to enhance consumer protection and provide a legal framework for measures, including criminal penalties. They have mandated that crypto companies disclose the assets they hold in financial reports, and exchanges must establish reserve funds with at least 3 billion won in bank accounts.
The proactive regulatory measures by South Korean lawmakers are grounded in the fact that the country's residents hold up to $98.5 billion worth of various crypto assets. This inadvertently increases concerns about Binance's legal standing and contributes to the decision to divest ownership.
Disclaimer. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own researBinance Seeks to Reduce its Stake in the South Korean Exchange GOPAX
By AZC News | Feb 01 2024
Binance Exchange is exploring options to divest part of its previous investment in GOPAX due to legal concerns raised by South Korean regulatory authorities.Binance Seeks to Reduce its Stake in the South Korean Exchange GOPAX
According to CoinDesk, Binance is currently in discussions to reduce its stake "within the next 1-2 months" in the South Korean cryptocurrency exchange GOPAX to address liquidity concerns following the collapse of FTX and concerns about compliance with local regulations.
Steve Kim, Binance's Director of Business Development for the Asia-Pacific region, stated that Binance aims to convert its loans to GOPAX into equity and then sell shares to other companies. This move is intended to alleviate debt issues within GOPAX. As a result, Binance, currently the largest shareholder, would drop to the second-largest position.
As previously reported, Binance acquired a significant stake in the GOPAX crypto exchange in February 2023, after the Korean exchange's parent company, Streami Inc, faced liquidity issues related to the bankruptcy of Genesis Global Capital, a lending platform, in January 2023. Genesis Global Capital was responsible for managing GOPAX's deposits.
The GoFi product was designed to generate profits for users who entrusted their digital assets to GOPAX. Since November 2022, GOPAX had temporarily suspended withdrawals of principal and interest from the GoFi service due to FTX's bankruptcy. Furthermore, Genesis's parent company, Digital Currency Group (DCG), is believed to be the second-largest shareholder in GOPAX and a key partner providing the GoFi product.
Binance is presumed to have intervened to inject capital into GOPAX to quickly resume withdrawal operations for customers. In exchange, Binance would own 72.26% of the South Korean exchange.
Related: Binance and Gulf Energy Launch Crypto Exchange in Thailand
Reasons for Binance Reducing its Stake in GOPAX
Binance's foray into the South Korean market through GOPAX has faced numerous legal hurdles, primarily due to regulatory issues with the Financial Services Commission (FSC) of South Korea. These challenges stem from Binance's troubles with the U.S. Securities and Exchange Commission (SEC), including allegations of violating the Commodity Futures Trading Commission's (CFTC) derivatives trading regulations and accusations of mingling customer funds, as reported by Reuters.
Furthermore, the FSC recently proposed new regulations to enhance consumer protection and provide a legal framework for measures, including criminal penalties. They have mandated that crypto companies disclose the assets they hold in financial reports, and exchanges must establish reserve funds with at least 3 billion won in bank accounts.
The proactive regulatory measures by South Korean lawmakers are grounded in the fact that the country's residents hold up to $98.5 billion worth of various crypto assets. This inadvertently increases concerns about Binance's legal standing and contributes to the decision to divest ownership.
Disclaimer. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own researBinance Seeks to Reduce its Stake in the South Korean Exchange GOPAX
By AZC News | Feb 01 2024
Binance Exchange is exploring options to divest part of its previous investment in GOPAX due to legal concerns raised by South Korean regulatory authorities.Binance Seeks to Reduce its Stake in the South Korean Exchange GOPAX
According to CoinDesk, Binance is currently in discussions to reduce its stake "within the next 1-2 months" in the South Korean cryptocurrency exchange GOPAX to address liquidity concerns following the collapse of FTX and concerns about compliance with local regulations.
Steve Kim, Binance's Director of Business Development for the Asia-Pacific region, stated that Binance aims to convert its loans to GOPAX into equity and then sell shares to other companies. This move is intended to alleviate debt issues within GOPAX. As a result, Binance, currently the largest shareholder, would drop to the second-largest position.
As previously reported, Binance acquired a significant stake in the GOPAX crypto exchange in February 2023, after the Korean exchange's parent company, Streami Inc, faced liquidity issues related to the bankruptcy of Genesis Global Capital, a lending platform, in January 2023. Genesis Global Capital was responsible for managing GOPAX's deposits.
The GoFi product was designed to generate profits for users who entrusted their digital assets to GOPAX. Since November 2022, GOPAX had temporarily suspended withdrawals of principal and interest from the GoFi service due to FTX's bankruptcy. Furthermore, Genesis's parent company, Digital Currency Group (DCG), is believed to be the second-largest shareholder in GOPAX and a key partner providing the GoFi product.
Binance is presumed to have intervened to inject capital into GOPAX to quickly resume withdrawal operations for customers. In exchange, Binance would own 72.26% of the South Korean exchange.
Related: Binance and Gulf Energy Launch Crypto Exchange in Thailand
Reasons for Binance Reducing its Stake in GOPAX
Binance's foray into the South Korean market through GOPAX has faced numerous legal hurdles, primarily due to regulatory issues with the Financial Services Commission (FSC) of South Korea. These challenges stem from Binance's troubles with the U.S. Securities and Exchange Commission (SEC), including allegations of violating the Commodity Futures Trading Commission's (CFTC) derivatives trading regulations and accusations of mingling customer funds, as reported by Reuters.
Furthermore, the FSC recently proposed new regulations to enhance consumer protection and provide a legal framework for measures, including criminal penalties. They have mandated that crypto companies disclose the assets they hold in financial reports, and exchanges must establish reserve funds with at least 3 billion won in bank accounts.
The proactive regulatory measures by South Korean lawmakers are grounded in the fact that the country's residents hold up to $98.5 billion worth of various crypto assets. This inadvertently increases concerns about Binance's legal standing and contributes to the decision to divest ownership.
Disclaimer. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.ch when making a decision.ch when making a decision.ch when making a decision.
