Major cryptocurrency exchange Binance is coming back to South Korea with a new acquisition of the local crypto trading platform Gopax.
Binance has acquired a majority stake in the Digital Currency Group-backed Gopax, re-entering South Korea after exiting the market two years ago, the company officially announced on Feb. 3. The funding for the transaction came from a finance-initiated investment project known as the Industry Recovery Initiative, to which Binance pledged $1 billion.
Binance CEO Changpeng Zhao pointed out that Binance is responsible for protecting not only crypto users, but also the crypto industry. “The Industry Recovery Initiative was created to support promising companies that were negatively impacted by the events of last year. We hope that taking this step with GOPAX will further rebuild the Korean crypto and blockchain industry,” he said.
Binance chief business officer Yibo Ling reportedly noted that Binance has acquired a “meaningful” equity position at Gopax, without disclosing the terms of the deal. Previous reports suggested that Binance purchased a 41% stake from Gopax’s largest shareholder, Lee Jun-hang, while the deal was originally set to be announced last year.
The acquisition comes a few months after Gopax halted withdrawals from certain products in November 2022 amid the collapse of the FTX exchange.
Gopax halted withdrawal of principal and interest payments in its decentralized finance (DeFi) service GoFi as a result of issues experienced by now-bankrupt crypto lending firm Genesis Global Capital. Prior to bankruptcy, Genesis' parent company Digital Currency Group was reportedly Gopax’s second largest shareholder and a key business partner, providing its GoFi product.
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With the acquisition, Binance plans to spend the new capital into the Gopax exchange for customer withdrawals and interest payments for GoFi. The initiative also aims to promote crypto education and close collaboration with the South Korean regulators and virtual asset stakeholders.
“The fundamental thrust of this deal was to support customers and make sure that any customers who want to withdraw their assets have the ability to do so,” Ling stated.