Gopax, one of the leading cryptocurrency exchanges in South Korea, allegedly sold the Genesis Global deposit claims of users at half the value in August 2023.
Gopax Sells Genesis Asset Claims At A Loss
Binance has a controlling stake in the crypto exchange. According to Cointelegraph, the Korea Economic Daily reported that Gopax “owes a total of 70 billion South Korean won ($51.4 million) to its users stemming from exposure to failed institutional crypto lending firm Genesis Global”.
Despite Genesis’s downfall in November 2022, the affiliated unpaid digital assets surged and currently have a value of roughly 100bn KRW against $69,000 per bitcoin. The Korean Times stated that Gopax’s rising debts put it in a “state of complete capital impairment”.
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Genesis, which operated the Gopax crypto custody service GoFi, stopped withdrawals after its $1.2bn exposure to the collapsed private hedge fund Three Arrows Capital. According to the Korea Economic Daily, a source close to the matter said:
We paid with Bitcoin obtained by selling the Genesis claim at a low price to a third party, and we are delaying payment of the remaining 50% of the damage, saying we will pay it after the acquisition of Gopax is completed.
Based on Cointelegraph data, Binance initiated the acquisition of a controlling portion of Gopax in February 2023. This purchase once again positioned Binance in the South Korean crypto exchange market.
In June 2023, the US Securities and Exchange Commission brought charges against Binance and halted the acquisition. This action by the US financial watchdog instigated a review of the agreement by the South Korea Financial Services Committee. The acquisition balances on the outcome of the lawsuit.
