Binance ongoing acquisition deal with South Korea’s crypto exchange Gopax suffers hurdle due to Genesis contagion.
The fifth-biggest exchange in South Korea, Gopax, will soon be acquired by Binance, the largest cryptocurrency exchange in the world. As a result, Binance has the chance to reenter the South Korean cryptocurrency market.
However, the Binance-Gopax agreement has been impacted by the FTX and Genesis contagion.Customers of Gopax’s wealth management product GoFi are owed around $47 million, and if a deal cannot be reached, investors may suffer severe losses.
DEAL BETWEEN BINANCE AND GOPAX IS COMPROMISED
In preparation for its entry into South Korea, Binance finished its due diligence on Monday about the purchase of South Korea’s crypto exchange. Furthermore, the acquisition agreement is nearing completion as Binance tries to purchase a majority interest from Gopax CEO Lee Jun-haeng, who now owns a 41.2% stake in the company.
Binance is talking about buying Gopax based on the assumption that GoFi will enable repayment. According to a Binance employee, the decision to purchase Gopax has not yet been made, according to local media Chosun on January 6.
In fact, according to industry experts, the acquisition might not go through until Genesis-related problems are resolved.
HOW GENESIS CONTAGION REACHED GOPAX
Genesis, a cryptocurrency lender, stops accepting repayments, withdrawals, and new loan applications in the wake of FTX’s demise. Genesis-related GoFi earn, a product of the cryptocurrency exchange Gopax, has also had withdrawal problems.
The second-largest shareholder in Gopax is DCG, the parent company of Genesis. The South Korea’s crypto exchange stated that it is in close contact with Genesis and its parent DCG in order to settle the financial concerns.
As information about Genesis’ connections to FTX and Alameda Research emerged, the situation worsened.It’s unlikely that Genesis will reimburse GoFi for the money.
In actuality, Gopax must pay back consumers of its financial management product GOFi roughly $47 million. Prior estimates placed the figure at roughly $23 million, but more recent information indicates that it is actually almost twice that much.
The industry anticipates the lowest estimate to be roughly $40 million taking into account all cryptocurrency market fluctuations after the refund stoppage on November 16.
The size of the transaction is anticipated to be equivalent to or greater than the total amount of GoFi’s repayments. Investors can lose millions of dollars as well as faith in the cryptocurrency industry if the transaction with Binance fails. South Korean investors have been significantly harmed by the Terra-LUNA problem.
