Although Binance is in the process of acquiring Gopax, the South Korean exchange has approximately $471 million in customer funds locked in Genesis.
Gopax, a South Korean exchange, must repay customers $471 million in deposits held in Genesis Trading, which could be lost if the Binance acquisition fails.
On January 2, Binance reportedly completed due diligence for the acquisition of Gopax and purchased a stake in the company’s largest shareholder, Lee Jun-hang, who owns 41.2% of the company.
According to Chosun on January 6, Gopax is facing a 600 billion won (approximately $471 million) shortfall from its Genesis Trading deposits.
The funds were reportedly locked in Genesis before redemption was suspended on November 16, 2022, due to the FTX fallout.
However, the chances of redeeming the funds locked in Genesis are dwindling as the crypto lender is rumoured to be considering bankruptcy.
“If the negotiations for Binance’s acquisition of Gopax shares fail, there is a high possibility that the damage to GoFi investors will become a reality.”
According to the report, Binance intends to acquire the majority stake in GOPAX, which is owned 41.2% by the CEO, Lee Jun-Haeng.
Furthermore, an official told the outlet that the exchange had planned to announce the acquisition late last year.
Furthermore, according to Decenter, the acquisition comes at a time when Gopax, which expanded its domestic business for the majority of 2022, is facing a liquidity crisis as a result of the fallout from FTX’s collapse.
Furthermore, the report stated that Binance had previously attempted to enter the Korean crypto market but was thwarted by regulatory stumbling blocks.
The country’s regulator imposed stricter restrictions on areas such as money laundering and investor protection. However, neither Binance nor Gopax have officially confirmed the news.
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