Binance to Acquire South Korean Exchange Gopax
As many of us know, the Asian crypto market is very large and has massive potential. Through a combination of high population and technological innovation, it has become one of the major markets for the industry. But despite all of this, it has often proven to be a challenging market to operate in, with Kraken just recently announcing that it will be exiting the Japanese market.
But even with all of these, large crypto firms are still taking the plunge. Case in point, Binance is reportedly in talks to acquire Gopax, which is one of the biggest crypto exchanges in South Korea.
Is Binance Coming to South Korea?
This news was made public by Decenter, a local South Korean news site. According to them, Binance has completed due diligence with regard to the exchange and is in the final stages of completing the purchase. This purchase will be of a 41.2% stake from its current CEO Lee Jun-haeng, who is the largest shareholder of Gopax. Reportedly, the deal was to have been announced last year but was delayed.
“We originally planned to announce the acquisition around Christmas last year, but we are in the process of final discussions on the value of the stake,” the report said, citing a source that is close to the matter.
And should Binance complete this deal, it will gain a major leg up in the South Korean market. This is because, along with Upbit, Bitsum, Coinone, and Corbit, Gopax is one of the top 5 crypto exchanges in the country. Binance had reportedly been trying to get into the South Korean market for a while but faced roadblocks from regulators.
But Gopax then found itself in a dire situation last year via a liquidity crisis. Due to global austerity measures and exposure to the FTX collapse, the exchange was facing financial challenges and this presented an opportunity for Binance. Gopax is already well-established in the South Korean market and Binance has the liquid capital to expand using its name. This would not be the first time that Binance would enter a foreign market this way as it did the same thing in Japan, buying a stake in the already-existing Sakura Exchange.
Finally, there is some ongoing discussion about the effect of Binance’s entry into the market on DAXA, the consultative body for the top 5 exchanges in Korea. More specifically, there is some discussion about what Binance’s potential capital influx will mean for the other members.
Citing an official close to the story, Decenter said, “Due to the recent collapse of Terra and Luna and the controversy over the distribution of Wemix, we are putting strict standards on listing, centered on Daxa, but if Binance participates in Daksa indirectly through Gopax, the listing requirements may be loosened.”
Binance Moving Forward
At the end of the day, all this is still speculation as Binance has not yet announced its acquisition but if and when it does, there will be massive implications.