Binance returned to the Korean cryptocurrency market after a two-year absence, making a “meaningful” investment in a local licensed crypto exchange; Gopax was in trouble following the collapse of crypto exchange FTX and crypto lender Genesis Global’s bankruptcy filing, and ran into trouble.
Binance invests in troubled South Korean crypto exchange
Cryptocurrency exchange Binance announced Friday that it has invested in Gopax, a licensed South Korean crypto exchange. The investment marks Binance’s return to the South Korean crypto market, which the company exited two years ago citing low utilization and transaction volume.
Gopax stopped withdrawing both principal and interest payments from its decentralized financial (defi) service Gofi last November “as a result 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 make affected users whole.” The global crypto exchange explained.
As part of the deal, Binance will inject capital into Gopax to fully secure potential Gofi users’ withdrawal requests for all staked deposits, including interest.
Gofi’s products are offered by Genesis Global Capital, a subsidiary of its partner Digital Currency Group (DCG), Gopax previously explained.Genesis, following the collapse of the crypto exchange FTX, in November, launched its lending arm, General Global Trading, stopped originating redemptions and new loans.
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. filed for bankruptcy, claiming that Genesis Global’s 10 largest listed as one of Genesis Global’s 10 largest known creditors in the bankruptcy filing.
According to Yibo Ling, chief business officer of Binance, the company has acquired a “meaningful” stake in Gopax, but terms of the deal were not disclosed.
Binance aims to help rebuild South Korea’s crypto and blockchain industry
Binance’s investment in Gopax is part of the Industry Recovery Initiative (IRI), which was launched last November following the collapse of crypto exchange FTX and the bankruptcy filings of several crypto companies.
Noting that the initiative was created “to support promising companies that have been negatively affected by the events of the past year,” stressed Changpeng Zhao (CZ), CEO of Binance.
By taking this step with Gopax, we hope to further rebuild the crypto and blockchain industry in Korea.
The two crypto exchanges will also work closely “to improve user education and blockchain awareness through Binance Academy,” Friday’s announcement concluded.