Binance Returns to Korean Crypto Market
• Cryptocurrency exchange Binance has returned to the South Korean cryptocurrency market with a “meaningful” investment in a local, licensed crypto exchange, Gopax.
• Gopax has been struggling since the collapse of FTX and the bankruptcy filing of crypto lender Genesis Global.
• Binance’s investment is part of its Industry Recovery Initiative (IRI) launched in November 2020.
Investment in Troubled Exchange Gopax
Cryptocurrency exchange Binance announced Friday that it has invested in Gopax, a licensed crypto exchange in South Korea. The investment marks Binance’s return to the Korean crypto market, which the company exited two years ago due to low usage and trading volume.
Gopax halted withdrawals of both principal and interest payments from its decentralized finance (defi) service „Gofi“ in November last year „as a consequence of the upstream challenges experienced by Genesis Global Capital LLC,“ Binance detailed. Binance will inject capital into Gopax with the objective of securing any potential Gofi users‘ withdrawal requests against all staked deposits, including interest. Gofi’s products are provided by its partner, Genesis Global Capital, a subsidiary of Digital Currency Group (DCG).
Genesis Global Bankruptcy Filing
Genesis halted redemptions and new loan originations at its lending arm General Global Trading in November following the collapse of crypto exchange FTX. The crypto lender then filed for bankruptcy in January following a lawsuit by the U.S. Securities and Exchange Commission (SEC) alleging that it offered and sold unregistered securities to retail investors.
Gopax’s parent company Streami Inc is listed as one of Genesis Global’s 10 largest known creditors in the bankruptcy filing. Yibo Ling, Binance’s chief business officer noted that they have taken a „meaningful“ equity stake but terms were not disclosed publicly.
Binace Industry Recovery Initiative
Binance’s stake in Gopax is part of their Industry Recovery Initiative (IRI), launched after several firms collapsed or filed for bankruptcy after FTX crashed. The initiative was created „to support promising companies that were negatively impacted by events“.
Conclusion
Binance’s return to investing into South Korea is an attempt to help rebuild the cryptocurrency industry there following some major losses caused by FTX’s crash and other bankruptcies filings associated with it . It remains to be seen if this move will pay off for them or not but it certainly shows their commitment towards helping revive an industry they had previously left behind two years ago