With the new capital, Binance plans to enable customer withdrawals and interest payments for Gopak’s GoFi yield product.
Major cryptocurrency exchange Binance is returning to South Korea with a new acquisition of local cryptocurrency trading platform Gopak.
Binance has acquired a majority stake in Digital Currency Group-backed Gopak, which re-entered South Korea after exiting the market two years ago, the company officially announced on February 3. Funds for the transaction come from an investment project initiated by finance. known as the Industry Recovery Initiative, to which Binance has pledged $1 billion.
Binance CEO Changpeng Zhao pointed out that Binance is responsible for protecting not only cryptocurrency users but also the crypto industry. “The Industry Recovery Initiative was created to support promising companies that were adversely affected by the events of the past year. We hope this step with GOPAX will further renew the Korean crypto and blockchain industry,” he said.
Binance’s chief business officer Jibo Ling reportedly noted that Binance had acquired a “significant” equity position in Gopak, without disclosing the terms of the deal. Previous reports suggested that Binance had acquired a 41% stake from Gopak’s largest shareholder, Lee Jun-hang, while the deal was originally set to be announced last year.
The acquisition comes months after Gopak halted the withdrawal of certain products in November 2022 amid the collapse of the FTKS stock market.
Gopak has stopped withdrawing capital and interest payments in its decentralized finance (DeFi) service GoFi due to problems faced by now-bankrupt cryptocurrency firm Genesis Global Capital. Before the bankruptcy, Genesis’ parent company Digital Currency Group was believed to be Gopak’s second largest shareholder and a key business partner providing its GoFi product.
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With the acquisition, Binance plans to spend the new capital on the Gopak exchange to withdraw customers and pay interest to GoFi. The initiative also aims to promote crypto education and close cooperation with South Korean regulators and virtual asset stakeholders.
“The primary purpose of this transaction was to support clients and ensure that all clients who wish to withdraw their assets have the ability to do so,” Ling said.