Binance Exchange has completed all the requirements to finalize the sales of a sizeable stake in the Gopax exchange. Binance exchange has sold more than 72.6% shares of Gopax exchange.
Binance’s Stake in the Trading Platform
As per the details on this matter, Binance now retains only 10% stake in the trading platform. The platform is native to South Korea.
Binance has sold the majority shares to a cloud service provider firm local to the region called Megazone. The local media outlet Chosun Iibo covered the news and published an article on the matter on 11th July 2024.
Insider news source quoted in the local media outlet has indicated that Binance opted to sell Gopax as part of the plan to improve governance infrastructure and to comply with local financial regulators.
However, South Korean regulators have moved to block the stock sales. The platform purchased trading platform shares in 2023. This decision to sell the shares of Gopax indicated Binance’s intention to return to the South Korean market alongside multiple business extractions, happing in Asian nations since 2021.
Therefore, regulators in South Korea took action to block this capital injection into Binance which would pave the way for the revival of the firm within the jurisdiction.
Binance Still Facing Regulatory Troubles in the United States
Binance exchange had fallout with the regulators in the United States during the start of the ongoing month. The trading platform was able to absorb the pressure on account of its massive followership across the globe.
Nevertheless, the Binance exchange has continued to face heightened regulatory hurdles in multiple sovereign regions. The regulatory woes with the Securities and Exchange Commission of the United States have contributed to increasing the skepticism around the trading platform.
Gopax was in the midst of renewing its real name contract with Jeonbuk Bank a few weeks before the Binance sales. Both firms drafted the real-name contract good for two years in August 2022. This contract expires on 11th August 2024. The firm is still in negotiating and deems it too soon to share more details.
Gopax is one of the multiple platforms that suffered from the aftereffects of the FTX demise. After the catastrophic fall of FTX in November 2022 Gopax management stopped the withdrawal for interest payments and principal transactions at its decentralized platforms.
This platform listed various products from the bankrupt firm Genesis. Before Genesis filed for bankruptcy, its parent firm Digital Currency Group was the largest shareholder of Gopax.
DCG was also running a partnership business venture in tandem with Gopax with a product offering by the name of GoFi. As per Chosun IIbo, Gopax had a payable of 118.4 billion won or $86 million as of April 2024.
The fake news has sparked anxiety and panic among investors hailing from the region postulating that South Korean regulators will review 600 local digital currencies starting from August.
Crypto Trading Volume Dropped in South Korea After Fake News
Panic and FUD got a hold of investors in South Korea after the circulation of fake news. In the aftermath of the trading volume of major local exchanges such as Upbit dropped by 10-20 percent within 7 days.
The news postulated that South Korean regulators were making preparations to crack down on local digital assets and planning to screen 600 digital products with an intention to suspending tokens that did not fulfill the regulatory requirements.
However, officials from the Financial Supervisory Service have since come forward to announce that the regulatory agency did not have any plans to directly monitory any digital assets.
The regulator noted that authorities will only deal with the legal viability of trading platforms and would not scrutinize individual virtual assets. The regulator further added that the decision was made as a result of the request from the Digital Asset exchange Alliance (DAXA) and local trading platforms.
