Binance has returned to the South Korean cryptocurrency market after two years with a “meaningful” investment in a local, licensed crypto exchange. Gopax fell into trouble following the collapse of crypto exchange FTX and the bankruptcy filing of crypto lender Genesis Global.
Binance Invests in Troubled Korean Crypto Exchange
Cryptocurrency exchange Binance announced Friday that it has invested in Gopax, a licensed crypto exchange in South Korea. The investment marks Binance’s return to the Korean crypto market, which the company exited two years ago, citing low usage and trading volume.
Gopax halted withdrawals of both principal and interest payments from its decentralized finance (defi) service “Gofi” in November last year “as a consequence of the upstream challenges experienced by Genesis Global Capital LLC,” Binance detailed. “Since then, Gopax has been working closely with local regulators and industry partners in an effort to raise funds to make affected users whole.” The global crypto exchange explained:
As part of this transaction, Binance will inject capital into Gopax with the objective of securing in full any potential Gofi users’ withdrawal requests against all staked deposits, including interest.
Gofi’s products are provided by its partner, Genesis Global Capital, a subsidiary of Digital Currency Group (DCG), Gopax previously explained. Genesis halted redemptions and new loan originations at its lending arm General Global Trading in November following the collapse of crypto exchange FTX.
The crypto lender then filed for bankruptcy in January following a lawsuit by the U.S. Securities and Exchange Commission (SEC) alleging that the company offered and sold unregistered securities to retail investors. Gopax’s parent company Streami Inc. is listed as one of Genesis Global’s 10 largest known creditors in the bankruptcy filing.
According to Binance’s chief business officer, Yibo Ling, the company has taken a “meaningful” equity stake in Gopax but the terms of the deal have not been disclosed.
Binance Aims to Help Rebuild the Korean Crypto and Blockchain Industry
Binance’s stake in Gopax is part of its Industry Recovery Initiative (IRI), launched in November last year following the collapse of crypto exchange FTX and the bankruptcy filings of several crypto firms.
Noting that the initiative was created “to support promising companies that were negatively impacted by the events of last year,” Binance CEO Changpeng Zhao (CZ) emphasized:
We hope that taking this step with Gopax will further rebuild the Korean crypto and blockchain industry.
The two crypto exchanges will also work closely “to improve user education and blockchain awareness through Binance Academy,” Friday’s announcement adds, concluding that Binance is committed to collaborating with local regulators and stakeholders to explore how it can “leverage its technology and liquidity to support the local ecosystem.”
The South Korean government announced this week that it will adopt a cryptocurrency tracking system within the first half of this year. In addition, the country’s Financial Supervisory Service (FSS) has revealed its plan to develop monitoring tools to regularly inspect the risks associated with crypto assets.