Binance is reportedly in the final stages of negotiations to reduce its stake in Gopax, a leading South Korean crypto exchange. This move comes as Binance seeks to address regulatory concerns and maintain Gopax’s status as a won-based exchange in South Korea.
Navigating Turbulent Crypto Regulation Waters
According to local media outlet IT Chosun, Binance is in talks with Megazone, a South Korean cloud service provider, to decrease its 72.6% stake in Gopax to around 10%.
This decision follows a year-long discussion with South Korean financial authorities. The authorities had withheld approval for Binance’s majority ownership of Gopax since the acquisition in February 2023.
The urgency of this deal is underscored by Gopax’s upcoming real-name account renewal contract with Jeonbuk Bank, due in August. To secure this renewal, Gopax needs to improve its governance structure and receive approval from financial regulators for the change in ownership.
Complicating matters, Gopax faces major financial challenges. The exchange’s debt, initially at 56 billion won following the FTX bankruptcy in 2022, has spiked to 118.4 billion won due to Bitcoin’s price surge. This financial struggle further emphasizes the need for a swift resolution to the ownership issue.
Binance had earlier agreed to pay off the 56 billion won in debt. With the Bitcoin price up, Binance is likely reconsidering its decision regarding the same.
The outcome of these negotiations could have far-reaching implications for both Binance and the crypto landscape in South Korea.
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