The world’s largest cryptocurrency exchange Binance is aiming to complete a 41% acquisition deal with South Korean exchange Gopax.
Binance has completed due diligence for the acquisition of the Korean firm and is in the process of the “final steps” of the deal, such as confirming the announcement of the procedure.
Gopax CEO, Lee Jung-Haeng, revealed the original plan was to announce the acquisition “around Christmas last year”, but confirmed that Gopax was in the process of final discussions with Binance over the value of the 41% stake.
Being one of five major crypto exchanges in South Korea, Binance has identified Gopax as a route to enter the Korean market despite suffering during the aftermath of the FTX collapse.
The crypto platform has been “steadily” trying to enter the Korean market but due to financial authority restrictions for virtual asset operators, held back on the venture. Gopax released in a statement that “that the interests of the two companies are aligned”.
Once Binance completes its deal with Gopax, it is expected to go rival fellow crypto exchange Upbit, who owns a large proportion of crypto capital within South Korea. Insiders within the country believe Binance’s presence and its own capital will bring about change to the Korean crypto sector, with more choices for investors and buy into more overseas firms too.
The crypto market is also projected to evolve in the country upon Binance’s arrival, despite Gopax only holding a 0.1% market share, compared to Upbit’s sizeable 80%. Binance currently holds nearly twice as many cryptocurrencies on its site and will promote the incentive for customers to move over to Gopax.
Binance initially set up ‘Binance Korea’ in 2020 but was blocked by the country’s financial securities department over checks on anti-money laundering and investor protection.
Binance chose a domestic exchange to overcome such barriers, similar to when the crypto exchange giant invested a stake in Japanese crypto platform, Sakura Exchange, last November.
Despite the deal close to being finalised, there are hurdles to overcome. Binance has become the subject of scrutiny over its proof of reserves, with its CEO Changpeng Zhao, insisting it’s still “business as usual” despite billions of dollars being pulled by investors last month.
Korean financial authorities’ stance on investor and customer protection has intensified over recent months due to recent collapses such as FTX, and will impose direct and indirect sanctions if the takeover is found to be in breach of its regulations.
