GOPAX Exchange of South Korea’s ‘In Trouble’ as the Offer for Acquisition ‘Stalls’

It seems the fight for the takeover of the South Korean crypto exchange GOPAX is reaching a very interesting conclusion, leaving a lot of questions regarding the company’s longevity.

It has been reported by Chosun Ilbo that there are stalled talks on a potential agreement where Megazone, a cloud service company would purchase Goipax and this includes the Goipax exchange, one of five that facilitates direct conversion of fiat to crypto in South Korea.

The majority owner of the company remains a little less than two-thirds of the South Korean-based GOPAX, which is majority owned by Binance, also a problem to the reality that South Korean financial authorities have intervened requiring Binance to cut ownership to a maximum of 10%.

As per what was made available to the public on December 24, industry sources suggested to the media the resolution between aforementioned companies of October was seeking to see no great developments. Megazone has urged its clients that conversations are still healthy and thriving, however, there are no official deals yet, which can be reported.

The overseas takeover case of Binance at Gonpay pledge had more lost due to the FTX collapse in 2022, severely impacting the exchange, being one of the many major issues the advanced exchange faces. Selling is something Binance is willing to do only if the acquisition goes through and they can clear the debt.

The majority of established Binance shares were intended to be purchased by Megazone at the first place.

The problem I see here is that most of GOPAX’s debt is in crypto and with the price volatility of especially BTC which went from 60k in October to 106k at recent times It would make settling the credits very hard.

Still, there remains the issue of creditors. There are many, who wish to be repaid in the same 2022 market value of funds lost, but there are also an equally large number of creditors who wish to be paid in Bitcoin irrespective of what time it was when funds were lent.

Furthermore, Chosun had suggested, If Megazone were to exit the exchange, GOPAX might end up in violation of regulations and therefore lose status as one of the very few entities that are legally allowed to provide FX exchange in South Korea.

Regulators have started manufacturing supervision over GOPAX as the firm has submitted a renewal of its VASP license whose validity is waiting to elapse since February 2021.

But more doting apparent losses will be incurred by Binance, which bought a controlling share at the start of 2023 in its bid to conquere the South Korean market, now that there is such uncertainty over the future of GOPAX.