Binance Streamlines Operations With the Sales of Its Majority Stake in Gopax to Megazone

In a timely effort to cushion its debt portfolio and aim at compliance with regulatory requirements, Binance, the largest global cryptocurrency exchange, is reportedly finalizing a deal to sell its majority stake in Gopax, a prominent South Korean crypto exchange. The buyer? Megazone — a leading cloud infrastructure provider in South Korea.

Gopax, one of the top five won exchanges in South Korea, has been under Binance’s management since early 2023, when the exchange acquired a 72.26% stake. However, regulatory hurdles and governance issues prompted Binance to reconsider its position.

The Sale

Binance is now in the concluding phase of selling over 62% of its stake in Gopax. The transaction will reduce Binance’s ownership to approximately 10%, according to a South Korean local news report — The Chosun Ilbo. This move aligns with requests from local financial authorities to improve governance structures.

The South Korean Financial Services Commission (FSC) has closely scrutinized Binance’s actions. After the acquisition, the FSC raised concerns about the change in Gopax’s largest shareholder. In March, Binance’s decision to lower stakes and reorganize its structure was communicated to the FSC. The impending sale of Gopax shares will likely facilitate the authorities’ processing of Binance’s report.

Gopax faced financial challenges due to the collapse of FTX Derivatives Exchange, which triggered a debt of 56 billion won. Although Binance agreed to offset this debt during the acquisition, regulatory authorities remained skeptical. The delayed inflow of funds to Binance further complicated matters, doubling Gopax’s debt to a staggering 118.4 billion won.

Jeonbuk Bank Real-Name Account Contract

Gopax’s real-name account contract with Jeonbuk Bank expires on August 11, 2024. Binance’s urgency to conclude the Gopax sale this month stems from the need to finalize the renewal of this contract. Binance and Gopax are racing against time to maintain their exchange status while navigating financial complexities.