South Korean crypto exchange Gopax saw some positive signs in 2023, despite reporting a net loss of $37 million. This marked an improvement from the previous year, but challenges persist.

Gopax's Path to Recovery Stalled by GoFi Debt

The exchange's struggles stemmed largely from GoFi, its crypto custody service. When GoFi's partner, Genesis Global Capital, faced a liquidity crisis in November 2022, Gopax users' funds got caught in the crossfire. This resulted in GoFi still owing a significant sum to users.

Bright Spots Despite the Setbacks

Gopax managed to find some silver linings. Revenue surged by a substantial 97% year-over-year, reflecting a recovering South Korean crypto market. Additionally, their net operating loss shrank considerably.

Binance's Acquisition Stalled by Regulatory Roadblocks

Binance's attempt to acquire Gopax in late 2022 aimed to address Gopax's liquidity issues and bolster Binance's presence in South Korea. However, regulatory hurdles have thrown a wrench in these plans.

Financial Authorities Put Binance on Hold

South Korean financial authorities have delayed accepting Gopax's change of ownership report for over a year, effectively stalling Binance's market entry. This delay is likely due to concerns surrounding GoFi's debt and the potential risks associated with Binance's involvement.

Binance Considers Restructuring Deal

Facing these roadblocks, Binance is reportedly exploring reducing its ownership stake in Gopax. This move could ease regulatory pressure and lessen Gopax's financial burden.

The Future Remains Unclear

While Binance remains Gopax's majority shareholder, the situation is fluid. With both companies seeking a solution, the future of Gopax and its relationship with Binance remains to be seen.