Binance, the largest global cryptocurrency exchange by trading volume, is in the final lap of its negotiation with the South Korean cloud service provider Megazone, to sell most of its Gopaz shares, according to a local news outlet ChosunBiz.
The crypto exchange intends to reduce its Gopaz shares from 72.6% to as small as 10% due to regulatory concerns.
Binance Acquires Gopaz
Binance acquired Gopaz in February 2023 after the debt of the exchange amounted to about 56 billion won following the collapse of the FTX derivative exchange, connected to Genesis Global Capital. The global crypto exchange agreed to settle the platform’s liquidity issues, in exchange for about 72% of Gopaz’s stakes.
However, Gopaz’s debt doubled to 118.4 billion Won during the negotiation process due to the prolonged regulatory review processes. The South Korean Financial Services Commission initially blocked the acquisition due to allegations of Binance’s involvement in money laundering. Subsequent risk assessments further delayed the acquisition.
Through the partnership, Binance was able to utilize Gopax’s technical know-how to access the South Korean cryptocurrency landscape thus making a name in the country’s market.
Unfortunately, the South Korean regulatory bodies raised security concerns and requested Binance to reduce its Gopaz shares to less than 10%. Binance has thus taken actions to reduce its holdings.
Megazone is finalizing the purchase of Binance Gopaz’s shares, with completion expected by month-end. According to a report made to ChosunBiz, “Binance is pushing for a share sale to meet the financial authority’s demand for improved governance ahead of the real-name account renewal with Jeonbuk Bank in August.”
Binance is trying to hasten the sale of its Gopaz shares before the pending renewal of Gopax’s real-name account contract with Jeonbuk Bank, which will expire on August 11, 2024.
Prior to Binance’s current arrangement to sell Gopaz’s shares to Megazone, the crypto company had earlier planned to negotiate with BF Labs, a domestic KOSDAQ-listed company. However, due to regulatory issues, Binance switched to the current platform.
Previously the platform faced regulatory issues in April after the platform’s founder, Changpeng Zhao, was sentenced to four months in prison for failing to establish adequate anti-money laundering protections.
