If you’re following the crypto winter, there’s some interesting news about Binance, the firm that played a key role in FTX’s collapse by pulling out of FTX’s currency back in November. According to BSC News, Binance has invested in GOPAX, a digital asset exchange headquartered in South Korea.
Binance Expands Its Presence in South Korea
Although Binance’s headquarters remain somewhat of a mystery after Malta officials denied that the company is licensed there, it must be licensed to operate somewhere since it passed South Korean due diligence for a 41% minority purchase of GOPAX. Further details around terms are not available.
GOPAX Seeks Funding Amid Crypto Industry Turmoil
GOPAX had been seeking financing since the industry fallout after the FTX fiasco, which is ongoing, including criminal prosecutions. Binance had launched an Industry Recovery Initiative as well, trying to stem the partial collapse across the global spectrum of crypto exchanges. The initial fund was $1 billion, and was set up in November 2022. According to BSC News, Binance had operated in South Korea between 2019 and 2021, though it doesn’t suggest why that stopped.
Binance’s Role in the FTX Collapse
Many will remember that the decline of FTX began with some reporting around its Alameda Research arm and potential issues with the FTT cryptocurrency (which was FTX’s own) and that insolvency was near. As more negative reports began to surface, Changpeng Zhao (CZ), the CEO of Binance, announced that the company would liquidate its entire holdings in FTT, which at the time was estimated around $580 million, just prior to the resulting crash. Binance had even then briefly announced that the company would buy FTX, but after some initial due diligence, the company quickly pulled the plug, resulting in FTX eventually filing for bankruptcy.
Regulatory Uncertainty Surrounds Binance’s Expansion
As some of the fallout continues and lots of expected regulatory activity is being discussed, it seems that Binance is OK for now and cryptos are having somewhat of a rally. As the article states, Binance “positions itself as the world’s leading blockchain ecosystem and crypto-asset infrastructure provider with a financial product suite that includes the largest digital asset exchange by volume.”
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group.
