Binance is reportedly close to finalizing negotiations with South Korean cloud service provider Megazone for the sale of a majority stake in Gopax, a local exchange.
According to a report from South Korean news outlet The Chosun Ilbo, Binance is preparing to reduce its current 72.6% stake in Gopax to as low as 10%.
Sources familiar with the matter, who preferred to remain anonymous, told the outlet that Binance is pursuing the sale of Gopax shares in order to enhance its governance structure, as requested by local financial authorities.
Binance Seeks to Renew Gopax’s Contract
The move comes as the world’s largest crypto exchange seeks to comply with regulatory requirements and ensure a smooth renewal of Gopax’s real-name account contract with Jeonbuk Bank, which is set to expire on August 11, 2024.
Binance initially acquired its majority stake in Gopax in February 2023, with the intention of reestablishing its presence in the South Korean market.
However, the South Korean financial authorities blocked Binance’s capital injection by denying the change in the largest shareholder at the time.
This setback prompted Binance to explore options to adjust its ownership in Gopax.
Binance Looking to Offload Stake in Gopax to Megazon?
1/ Binance is in late-stage negotiations to sell its 72.6% stake in Gopax, one of Korea’s top 5 won-based crypto exchanges, to Megazon, the parent company of Mega Cloud.
2/ The move comes as Binance faces pressure from… pic.twitter.com/4XpbSudUSm
— Ryan Yoon | TigerResearch (@ryanyoon_eth) July 11, 2024
Meanwhile, in April, Gopax disclosed a net loss of 51.3 billion Korean won ($37 million) for the fiscal year 2023, as reported in the year-end financial statement released by its parent company, Streamy.
This figure is an improvement compared to the net loss of 90.6 billion won in 2022.
Despite the net losses, Gopax exhibited favorable year-over-year performance in 2023.
The exchange reported a significant increase in revenue, which surged by 97% to reach 3.1 billion won.
Furthermore, the net operating loss decreased substantially, contracting 78% to approximately 17 billion won.
Binance Maintains Leading Position
It is worth noting that Binance continues to hold its position as the world’s largest cryptocurrency exchange, boasting over 200 million users and managing assets totaling $100 billion.
Just two years ago, in 2022, Binance reported a user base of around 130 million.
By 2023, the exchange had added 40 million more users, bringing the total count to 170 million.
Impressively, in the first half of 2024 alone, Binance has already added at least 30 million new users.
In May, the Financial Intelligence Unit of India (FIU-IND) revealed that Binance has successfully registered with the regulatory body, returning to the country after some regulatory hurdles.
Prior to that, the exchange announced that it had obtained a license from Dubai’s regulator, VARA, enabling the platform to cater to retail clients along with qualified and institutional ones.
Nevertheless, Binance has faced increasing regulatory scrutiny worldwide.
Last year, the Commodity Futures Trading Commission (CFTC) filed charges against Binance for allegedly operating an illegal digital asset derivatives exchange and evading federal laws.
Similarly, the US Securities and Exchange Commission charged Binance Holdings LTD and ex-CEO Changpeng Zhao (CZ) for allegedly operating unregistered exchanges, broker exchanges, clearing houses, and the unregistered offer and sale of securities.
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