Binance is finalizing the sale of its majority stake
in crypto exchange Gopax to South Korean cloud service provider Megazone, local
media publication The Chosun reported. This decision is pivotal for Gopax, one
of Korea’s top five won exchanges, as it faces the risk of delisting if
governance issues remain unresolved.
Enhancing Governance
Currently, Binance holds a 72.6% stake in Streami, the
operator of Gopax. However, the exchange plans to reduce its stake to around
10% by selling shares to Megazone. This move is reportedly part of the exchange’s initiative to enhance its governance structure, a requirement set by financial
authorities to process a change report ahead of renewing Gopax’s real-name
account contract with Jeonbuk Bank.
A virtual asset industry insider told the media
publication that the sale aims to meet the demands of financial authorities,
who have delayed approving Binance’s change report for over a year. The
Financial Services Commission has reportedly insisted that Binance reduce its
stake to less than 10% to proceed with the report. Binance responded in March,
committing to restructure its governance and lower its Gopax stake.
Previously, BF Labs, a domestic KOSDAQ-listed company,
emerged as a potential partner for Binance. BF Labs acquired an 8.55% stake in
Streami and sought to increase its holdings. However, funding issues halted
further acquisitions, leaving Binance to seek other solutions to comply with
regulatory requirements.
The urgency of this stake sale is underscored by the
looming deadline for Gopax’s real-name account renewal with Jeonbuk Bank on
August 11. The revised Special Financial Transactions Act mandates that
exchanges report changes related to real-name account renewals at least one
month prior to signing the contract. Thus, a decision on the renewal must be
reached by the end of this month.
GOPAX Faces Financial Distress
GOPAX is currently experiencing severe financial
distress, with total debt reaching 118.4 billion won as of April this year. The
debt situation worsened due to the rise in Bitcoin prices and the fallout from
the FTX bankruptcy in 2022, which left Gopax with significant liabilities.
Although Binance agreed to cover Gopax’s 56 billion won debt during the
acquisition, this agreement hinged on financial authorities allowing Binance’s
entry.
A Megazone representative mentioned that they are
exploring various forms of collaboration, including equity acquisition, but
emphasized that no concrete decisions…
