Moment of Joy for South Korean Crypto Investors
South Koreans would be more than just pleased to learn the news that Binance is making its re-entry into their crypto markets.
An official announcement has been made by Binance in which the world’s leading centralized firm revealed returning back to South Korea.
According to the announcement, Binance is currently in the process of finalizing an acquisition deal in South Korea.
The announcement revealed that Binance had invested funds into a local crypto company ‘Gopax’ for the purposes of acquisition.
This acquisition would mark Binance’s re-entry and return into one of the fastest developing and rapidly expanding crypto markets of the world.
South Korea is among the countries where the adoption of cryptocurrencies is very remarkable. The cryptocurrency industry has continued expanding in the country and it is thriving in the region.
This is the reason why the Binance exchange is eager to gain access to the South Korean market. It wants to become part of South Korea, which is considered a crypto hub and wants to increase its worldwide influence.
Reasons behind the Acquisition of ‘Gopax’
Gopax was once a prominent locally licensed crypto firm in South Korea that had also established decentralized finance (defi) facility called ‘Gofi’. Gopax was also widely known as the partner of the recently collapsed crypto firm, FTX.
The firm was also one of the main borrowers of Genesis Global Capital LLC.
However, Gopax started to incur losses which led to financial hardships and ultimately it became certain that Gopax would soon default.
Financial hardship was thrust upon Gopax when Genesis Global demanded immediate repayment of loans by as the latter was also experiencing hardships.
Thereafter, for avoiding crashes, Gopax started to work closely with local regulators in an effort to gather funds for meeting customers’ claims/refunds.
Binance came to help Gopax and assured Gopax of pooling capital in the firm for putting it back on its feet. In return, Gopax would ensure providing Binance access to its Gofi users as part of the deal.
On the other hand, Gopax would utilize capital injection for onward payment to customers whose withdrawals the firm had earlier suspended.
Shortage of Funds at Gopax
Apart from being a crypto trading platform, Gopax was also offering DeFi products to its customers. For this service, Gofi was borrowing loans from Genesis Global Capital which is owned by Digital Currency Group.
Due to unavoidable circumstances, Genesis stopped receiving from its lender namely ‘General Global Trading’ last year.
Non-availability of ready crypto loans, Gopax was left with no option but to hold its Gofi services in abeyance.
Meanwhile, Gopax’s lender for its Gofi services was forced into seeking bankruptcy protection in the US jurisdiction.
Soon after Genesis sought bankruptcy protection, it faced another challenge which came in the shape of the SEC’s lawsuit against the lending firm.
At that moment, it became apparent to Gopax that it has been brought to the brink of collapse.
In desperation, Gopax started to look firstly for substitute lenders, however, the firm failed in this attempt. Thereafter, Gopax tried to convince institutional investors to inject capital which attempts also went wasted.
Special Provisions of the Deal Not Disclosed
It may be noted that Binance’s acquisition of Gopax was also re-affirmed by the firm’s Business Development Chief, Yin Ling.
Ling stated that Binance has successfully injected a fair amount of capital into a South Korean firm namely Gopax. He only explained the gist of the basic provisions of the deal arrived at between Gopax and Binance.
However, the full context of the deal i.e. the special terms and conditions, have deliberately not been disclosed for ensuring secrecy and confidentiality.
What is sure however is that Binance is going back into the market where it had stopped rendering services two years ago.
In fact, Binance is anxiously awaiting for launching its services through Gopax because Gopax was already a fully licensed crypto entity.
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