Binance Affiliate Gopax Sells Genesis Lender Claims at Big Discount: Report
GoPax, a top-five South Korean crypto exchange by market share and majority-owned by Binance, has reportedly sold its users' deposit requests at half price in August 2023.
According to a May 27 report by local news agency Hankyung, or the Korea Economic Daily, Gopax owes its users a total of 70 billion South Korean won ($51.4 million) due to its exposure to institutional crypto lender Genesis Global, which collapsed in November. 2022. Of this amount, Gopax is said to have paid 50% to consumers.
But in November 2022, at the nadir of the crypto market, 35 billion worth of unpaid digital assets totaled $100 billion, with the price of Bitcoin (BTC) rising to $69,000. In March, The Korea Times reported that Gopax is currently in a “state of total capital impairment” due to mounting debt.
Genesis was the operator of GoPax crypto custody service GoFi, which halted its exit due to its $1.2-billion exposure to ailing Singaporean hedge fund Three Arrows Capital. A source interviewed by the Korea Economic Daily made the following comments.
“We paid the Genesis claim with the bitcoins we earned by selling it to a third party at a low price, and we are deferring the payment of the remaining 50% of the damages after the acquisition of Gopax is complete.”
In the year In February 2023, Binance bought a “significant” equity position in Gopax, without disclosing the terms of the transaction, making a return to the South Korean market for the crypto exchange.
However, on June 7, 2023, a lawsuit against Binance by the United States Securities and Exchange Commission halted the acquisition, prompting South Korea's Financial Services Committee to review the deal.
Earlier this month, Genesis secured a $3-billion settlement in US bankruptcy courts to return cash and cryptocurrency to creditors. Presiding Judge Sean Lane rejected a challenge by Genesis parent company Digital Currency Group (DCG), which argued that the bankrupt subsidiary should not pay its customers and creditors more than the value of its crypto assets. The move leaves DCG with no recovery from Genesis' bankruptcy proceedings.
Related: Binance.US Wins Appeal to Restore Florida Money Services License
