Binance is reportedly in talks to sell a majority stake in South Korean exchange Gopax.
Key receivers
Binance plans to reduce its stake in Gopax from 72.6% to 10%. The share sale is in response to South Korean regulators' questions about the management structure.
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According to a July 11 report by The Chosun Ilbo, Binance is reportedly in the final stages of selling a majority stake in South Korea-based crypto exchange Gopax to local cloud service provider Megazone.
The global crypto exchange is seeking to reduce Gopax's 72.6% ownership to 10% in response to requests from South Korean financial authorities to reform the exchange's governance structure. The stake sale comes as Gopax faces an August 11 deadline to renew its real name contract with Jeonbuk Bank, which was signed for a two-year term in August 2022.
In the year Binance acquired a controlling stake in Gopax in February 2023 as part of efforts to enter the South Korean market after ceasing several operations in 2021. However, South Korean regulators have so far blocked Binance's approval for most ownership changes. Capital injection to Gopax.
An unnamed industry insider told Chosun Ilbo that Binance is pursuing the share sale to meet regulatory reform requirements ahead of Gopax's real-name account renewal. The source indicated that a deal could be finalized this month.
Regulatory hurdles have left Gopax in dire financial straits. As of April 2024, Gopax reportedly had total debt of 118.4 billion won ($91.5 million). This includes the outstanding debt of 63.7 billion won to users of the GOFI product and the 36.4 billion in Binance loans to help pay those users.
For Gopax, ensuring real-name account renewal is critical to maintaining its status as a winning established cryptocurrency exchange in South Korea. If approved, the stake sale to Megazone could pave the way for new capital investment and regulatory approvals to strengthen Gopax's finances and operations.
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