•Binance plans to enter the Korean market by acquiring a local crypto exchange, GOPAX.
• The leading crypto exchange intends to buy a 41% stake in GOPAX.
• Binance originally intended to complete the purchase late last year but negotiations about the deal had to linger till the new year owing to discussions about the value of the stake.
• The stake will be purchased from Lee Jun-haeng, Gopax’s CEO and largest shareholder.
• Recall that Binance had announced its direct entry into the Korean market through its subsidiary but closed its affiliate company in South Korea in December 2020 due to disagreements with local regulators.
After months of negotiations, Binance has finally announced its plans to enter the Korean market. The cryptocurrency exchange giant is planning to buy a stake in GOPAX, one of South Korea’s largest crypto exchanges. The move is expected to have a significant impact on the local crypto exchange scene and could pave the way for further collaborations between South Korea and international crypto companies. Let’s take a closer look at this proposed acquisition and what it could mean for both parties involved.
Background on Binance’s Intentions
Binance initially planned to directly enter the Korean market by establishing an affiliate company that would offer various crypto services in the country. However, these plans were abandoned in December 2020 due to regulatory uncertainties surrounding cryptocurrencies in South Korea. This led to negotiations about acquiring GOPAX being delayed until 2021.
The deal would involve Binance buying a 20% stake from Lee Jun-haeng, Gopax’s CEO and largest shareholder. It is expected that this will give Binance access to GOPAX’s customers, expand its brand visibility in South Korea, and provide additional capital infusions for Gopax. It also stands to benefit existing customers of Gopax as they will gain access to more advanced trading features such as margin trading and automated market making (AMM).
Further Analysis of Negotiations between Binance and Gopax
Discussions about the value of the stake have been ongoing between both parties since last year. While initial reports suggested that the stake was valued at $50 million, recent reports indicate that it may be worth much less than that. Local regulators have also expressed their concerns about allowing an international company like Binance into South Korea’s domestic market, which could affect future dealings between them if this deal goes through as planned.
Both parties believe that this acquisition would be mutually beneficial for them in terms of customer base expansion, brand visibility, capital infusions, etc., which is why they are still pushing forward with negotiations despite all the delays and obstacles along the way. If successful, this could set a precedent for other exchanges operating within South Korea looking to collaborate with international companies moving forward.
There are many factors as to why Binance is so intent on entering the Korean market through an acquisition of GOPAX – it offers them many commercial benefits while also providing valuable services and features to existing customers of Gopax who now stand to gain access to more advanced trading features like margin trading and automated market making (AMM).
Although there are still some regulatory hurdles that need to be overcome before any deal can be finalized, it seems likely that both sides will find common ground soon enough given how much each stands to gain from this transaction. Ultimately, only time will tell how successful this venture turns out for both Binance and Gopax but either way it looks set to revolutionize South Korea’s domestic crypto exchange scene for years ahead.
