Binance has returned to the South Korean cryptocurrency market after two years with a “significant” investment in a licensed local cryptocurrency exchange. Gopax got into trouble after the collapse of cryptocurrency exchange FTX and the bankruptcy of cryptocurrency lender Genesis Global.
Binance Invests in Troubled Korean Crypto Exchange
Cryptocurrency exchange Binance announced on Friday that it has invested in Gopax, a licensed cryptocurrency 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 principal and interest payments from its decentralized finance (defi) service “Gofi” in November last year “as a consequence of 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 recover affected users.” The global crypto exchange explained:
As part of this transaction, Binance will inject capital into Gopax with the aim of fully guaranteeing any potential Gofi user’s withdrawal requests against all wagered 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 repayments and new loan origination at its General Global Trading lending arm in November following the collapse of crypto exchange FTX.
The crypto lender then filed for bankruptcy in January following a lawsuit from the US 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 the 10 largest known creditors of Genesis Global in the bankruptcy filing.
According to Binance’s chief commercial officer, Yibo Ling, the company has acquired a “significant” equity stake in Gopax, but the terms of the deal have not been disclosed.
Binance Aims to Help Rebuild the Korean Cryptocurrency 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 cryptocurrency exchange FTX and the bankruptcy filing of several cryptocurrency companies.
Noting that the initiative was created “to support promising companies that were negatively affected by the events of the past 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 enhance user education and awareness of blockchain through Binance Academy,” the announcement on Friday added, concluding that Binance is committed to collaborating with local regulators and stakeholders to explore how you can “leverage your technology and liquidity to support the local ecosystem.”
The South Korean government announced this week that it will adopt a cryptocurrency tracking system during the first half of this year. Furthermore, the country’s Financial Supervisory Service (FSS) has revealed its plan to develop monitoring tools to regularly inspect the risks associated with crypto assets.
What do you think about Binance’s re-entry into the Korean crypto market? Let us know in the comments section.
image credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or a solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
