Binance, the leading global cryptocurrency exchange, has announced plans to sell its majority stake in Gopax, a prominent South Korean crypto exchange. This decision comes after Binance’s acquisition of the stake last February, aimed at re-entering the South Korean market, was met with regulatory challenges from South Korea’s Financial Services Commission (FSC) and the U.S. Securities and Exchange Commission (SEC).
The divestiture is in response to new reporting requirements for virtual asset service providers (VASPs) in South Korea. Binance is set to convert the credit used for GoFi repayment into equity and sell a portion of its shares, along with Gopax’s debt, to address these regulatory concerns.
Steve Young Kim, Binance’s Asia-Pacific director, cited the absence of clear guidelines for virtual asset reporting as a significant factor in the decision. The exchange is proactively reducing its shareholding as a precautionary step while seeking constructive engagement with financial authorities.
Binance had previously exited the South Korean market in January 2021 but made a strategic move to re-enter by acquiring a stake in Gopax. South Korea’s vibrant crypto economy, talent pool, and startup ecosystem make it a critical market for Binance’s expansion plans, particularly in Blockchain and Web3 innovations.
Despite a partial recovery in the market following a settlement with the U.S. Department of Justice and leadership changes, Binance continues to face legal challenges from the SEC, which affects its operations and strategic decisions.