Breaking: FTX, Genesis Contagion Reaches Binance’s Gopax Acquisition Deal
The world’s largest crypto exchange Binance is all set to acquire South Korea’s fifth-largest exchange Gopax. This gives Binance an opportunity to re-enter the South Korean crypto market. However, FTX and Genesis contagion has affected the Binance-Gopax deal.
Gopax needs to repay about $47 million to customers of its wealth management product GoFi and failing to reach the deal will make investors suffer massive losses.
Binance and Gopax Deal Suffers Obstacle
On Monday, Binance completed due diligence on the acquisition of Gopax as it plans to enter South Korea. Moreover, the acquisition deal has reached the final stage as Binance looks to buy a majority stake from CEO Lee Jun-haeng, who has a 41.2% stake in Gopax.
Binance is discussing the acquisition of Gopax on the premise of GoFi repayment support. An employee of Binance said that the acquisition of Gopax has not been decided, reported local media Chosun on January 6. In fact, industry experts believe the deal may not happen until issues related to Genesis resolve.
How Genesis Contagion Reached Gopax
Following the collapse of FTX, crypto lender Genesis halts repayments, withdrawals, and new loan originations. Crypto exchange Gopax’s GoFi earn product, which is linked to Genesis, has also suffered withdrawal issues.
Genesis’ parent DCG is the second-largest shareholder of Gopax. Therefore, Gopax said it is communicating closely with Genesis and its parent DCG to resolve the repayment issues. The situation continued to deteriorate as Genesis links to FTX and Alameda Research surfaced.
The possibility of Genesis returning the GoFi funds is low. In fact, Gopax needs to repay about $47 million to customers of its wealth management product GOFi. It was earlier expected to be around $23 million, but recent reports have revealed that amount is almost double.
Considering all crypto market changes since the repayment suspension on November 16, the industry expects the lowest estimate to be around $40 million. The size of the acquisition is expected to be equal to or exceed the total repayment amount of GoFi.
If the deal with Binance fails, investors could lose millions and confidence in the crypto market. The Terra-LUNA crisis has severely impacted South Korean investors.
Also Read: Genesis-Parent DCG Shuts Down Its Wealth Division Unit Amid Troubles
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