Binance South Korea is about to come into existence as the largest crypto exchange buys a major stake in another Koren crypto exchange. The move by Binance is to find a way to enter the Korean market after leaving it in 2020.
According to information from trusted sources, Binance is about to acquire Gopax, a Korean exchange and is in the process of making it official. According to an official who knows the situation, "We originally planned to announce the acquisition around Christmas last year, but we are in the process of final discussions on the value of the stake."
Binance reportedly bought about 41.2% stake in the Gopax exchange, making them the highest stakeholders of the Korean exchange. After Korean regulations made them halt Binance, South Korea, the number one cryptocurrency exchange, has been trying to find a way back. With strict regulations against the exchange, Binance had to find a detour into the Korean market. Gopax serves that purpose as their stake in the Korean exchange will soon be made official.
Binance About to Bail Out Gopax
The deal between Gopax and Binance will serve as a bailout for the South Korean crypto exchange. Because of the FTX shakeup and the latest bear market, Gopax has been having issues with liquidity.
Gopax is one of the Korean exchanges denominated by the South Korean currency won. Because of the government's strict restrictions on other exchanges based in other countries, the deal between Binance and Gopax will benefit the two.
Despite being denominated by the South Korean currency won, Gopax is still not the number one cryptocurrency exchange in the country because of its numerous issues. But with Binance coming into the scene with huge capital, it won't be long before Gopax overtakes Upbit (the largest crypto exchange in South Korea).
Also, Binance is looking to use this opportunity and expand in the South Korean market, so there would be massive funding in the name of Gopax to make this happen.
This is Not Binance First Time In the Korean Market
This is not the first time Binance has tried to break into the South Korean crypto market. It tried using a more direct approach before it closed down Binance South Korea in 2020.
The restrictions that prevented Binance from continuing were largely based on the government's anti-laundering and investor protection laws.
When this event happened in 2020, Binance released a report telling its users about the decision to close down Binance South Korea. The news release read, "Binance KR will terminate its local exchange operations due to low usage and volume with limited trading pairs of BKRW, resulting in limited liquidity for its users. Following the exchange's closure, the Binance KR team will reassess its market strategy based on the resources and experience gained from operating a local exchange."
When this happened, they apologized to their customers already using their services in the Korean crypto market. In addition to this, they gave us instructions which customers should follow.
"Binance.com users who have BKRW, a token issued by Binance.KR, with a price pegged to the Korean Won at a 1:1 rate, has several choices to settle the BKRW assets on the Binance exchange."
"We apologize for any inconvenience. Our customer support team will be available throughout the offboarding process leading to the closure," they added.