Cryptocurrency exchange Binance has confirmed engaging in early stage discussions regarding its stake in Gopax, a South Korean crypto exchange. The confirmation comes amid reports suggesting that Binance is exploring the sale of its majority stake in Gopax, a move that may indicate its potential exit from the South Korean market for the second time, according to DLNews report.
Binance initially acquired a majority stake in Gopax in February 2023, stepping in to support the struggling exchange. At the time, Gopax had faced challenges, including halting withdrawals on its DeFi platform GoFi due to "upstream challenges." Binance's strategic investment in Gopax signaled its return to the South Korean market after exiting in January 2021.
The cryptocurrency exchange has employed a similar strategy in other regions, acquiring stakes in local exchanges to re-enter markets it had previously departed due to regulatory issues. For example, Binance exited the Japanese market following regulatory warnings in 2018 and 2021. However, in November 2022, it acquired Sakura Exchange BitCoin in Osaka, rebranding it as Binance Japan in August 2023 after ensuring regulatory compliance.
Binance's recent discussions about its Gopax stake come amidst a broader regulatory crackdown on cryptocurrency companies in Asia. South Korea, in particular, is set to introduce new crypto regulations in July, following the implementation of consumer protection laws in the previous year.
As discussions progress, stakeholders and industry observers will closely monitor Binance's decisions in navigating regulatory dynamics in the South Korean market. The outcome may shed light on the exchange's strategic approach to regulatory challenges across different regions.