Binance has finished its due diligence on the Gopax purchase and is moving on to the last steps, such as certifying the process. A senior official said they planned to announce the deal around Christmas last year, but they are still finalizing the stake valuation. Even after Binance buys a 41.2% stake from Gopax CEO Lee Jun-haeng, the representative system will still be in place.
Gopax Ranks among Five Top Korean Local Exchanges
Gopax is one of five main Korean cryptocurrency exchanges (Upbit, Bitsum, Coinone, Corbit, and Gopax) that accept won. In February 2014, it connected its main account with Jeonbuk Bank and published its name as a won currency exchange. It then started to build up its home company, but it ran into cash flow problems because of global austerity measures and the collapse of FTX.
Binance tried to enter the Korean market, but because of anti-money laundering and investor protection regulations, it discovered a detour. Both firms’ interests are matched; thus, this arrangement moves quickly.
Binance bought a domestic exchange because it couldn’t get into the country because of rules. Binance launched Binance Korea in 2020 and pushed for direct entry. They bought a won-denominated settlement exchange to avoid anti-money laundering and investor protection checks by the financial authorities. Gopax was the perfect target for Binance because it needed cash to buy domestic exchanges to get around the rules. Binance bought a stake in Sakura Exchange (SEBC) when it entered Japan in November.
Binance Equips to Compete Upbit in Local Market
If Binance joins the local industry seriously, the cryptocurrency market will be shaken. With a market share of over 80%, Upbit is the only one of Korea’s five major won exchanges that can beat it. If Binance and Gopax share an order book, Gopax’s 0.1% market share will grow. Binance lists 350 coins, double Upbit. Investors will want to move there if trading is allowed on Gopax because it has more cryptocurrencies.
Binance enables futures trading, unlike local exchanges that focus on spot trading. In 2021, Gopax will stop trading BULL and BEAR tokens that track at least three times the swings of the assets they track. With Binance’s engagement in the domestic market, derivatives listings may resurface. It is uncertain if it will pass financial regulators’ scrutiny. Under domestic legislation, it would be impossible to trade Binance derivatives on Gopax. This deal has several remaining barriers.