The leading crypto exchange, Binance, is making headlines with its plan to sell its stake in the South Korean crypto exchange GOPAX. According to a recent report, the exchange aims to sell its 72.6% stake in GOPAX to MegaZone, the parent company of MegaZone Cloud. Notably, this move comes as part of the exchanges effort to restructure its governance to meet regulatory requirements.

Binance, one of the top crypto exchanges, is negotiating the sale of its GOPAX shares to MegaZone, significantly reducing its stake to around 10%. Notably, this decision is driven by the need to comply with the Financial Services Commissions request to change the largest shareholder and improve governance.

Meanwhile, the crypto exchanges acquisition of a 72.26% stake in GOPAX last year faced delays in approval from financial authorities, necessitating this strategic move. An industry insider commented, Binance is pushing for the sale to improve its governance structure as requested by financial authorities to process a change report ahead of the renewal of its real-name account contract with Jeonbuk Bank in August, the translated version of the report showed.

Meanwhile, the financial authorities have withheld a decision on the exchanges report for over a year, prompting this sale to facilitate regulatory approval. Last year, BF Labs, a domestic KOSDAQ-listed company, acquired an 8.55% stake in Streami, GOPAXs operator, becoming the second-largest shareholder.

However, their attempt to increase their stake further failed due to funding issues. Now, MegaZone emerges as a potential key player in resolving its regulatory challenges.

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The sale of GOPAX shares is crucial for Binance and GOPAX to maintain their status as a won exchange. The real-name account renewal contract with Jeonbuk Bank, due on August 11, requires the exchange to restructure its governance and secure financial authorities approval. GOPAXs current state of complete capital erosion adds urgency to this situation.

Meanwhile, the crypto exchange had agreed to pay off GOPAXs 56 billion won debt incurred from FTXs bankruptcy in 2022, conditional on regulatory approval for its entry. However, the authorities, have not accepted the report for over a year, and the inflow of funds has been delayed.

With Bitcoin prices rising, GOPAXs debt has doubled to 118.4 billion won as of April this year. Meanwhile, the report cited a MegaZone official stating:

We are discussing various forms of collaboration, including equity acquisition, subject to government approval.

The discussions are ongoing, and the specifics of the process and timing remain undecided. Meanwhile, this sale represents a significant move for Binance as it navigates regulatory landscapes and seeks to solidify its position in the South Korean market.

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Just-In: Binance Plans Selling Its GOPAX Stakes To MegaZone - CoinGape