Binance Plans to Reduce Majority Stake in GOPAX
Cryptocurrency exchange Binance is considering selling some of its shares in GOPAX, a digital asset exchange based in South Korea. The decision comes as a result of changes to the regulation of Virtual Asset Service Providers (VASPs) in South Korea. Binance aims to resolve the reporting changes issue by reducing its stake in GOPAX within a month or two.
Changing Regulatory Landscape
The changing regulatory landscape in South Korea may push Binance to reduce its presence in the market. This potential exit could come just a year after Binance became a majority shareholder in GOPAX through its Industry Recovery Initiative.
Delay in Approval
Approval for the change in the report on directors and other business structures has been delayed due to judicial risks. In response, Binance plans to convert the money it invested into GOPAX into GoFi payments as equity and sell its stake in order to solve the VaSP reporting problems.
Binance’s Rescue of GOPAX in 2023
In 2023, Binance injected funds into GOPAX to cover financial difficulties faced by the exchange’s decentralized finance (DeFi) service, GoFi. This move was part of Binance’s Industry Recovery Initiative aimed at supporting promising companies. By saving GOPAX, Binance hopes to rebuild the cryptocurrency industry in South Korea.
Regulatory Hurdles and Market Exits
Binance has faced regulatory hurdles in various markets, leading to either complete exits or partial exits through investments in local subsidiaries. Last year, Binance exited the Russian market due to regulatory concerns. It also left the Japanese market in 2018 and 2021 before relaunching Binance Japan in 2023.
Hot Take: Binance’s Strategic Shift in South Korea
Binance’s decision to reduce its majority stake in GOPAX reflects the challenges posed by evolving regulations in South Korea. By adjusting its presence in the market, Binance aims to navigate the regulatory landscape while ensuring compliance. This strategic shift follows Binance’s previous rescue efforts for GOPAX, highlighting the exchange’s commitment to supporting promising companies and rebuilding the cryptocurrency industry. As Binance continues to adapt to regulatory changes worldwide, its actions will shape the future of the crypto market in South Korea and beyond.
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