Binance-backed Gopax narrows losses amid strong crypto trading

Binance-backed cryptocurrency exchange Gopax reported lower net losses for 2023, according to its parent company Streami’s year-end financial report.

The Seoul-based trading platform, which is among South Korea’s five fully licensed crypto exchanges, saw its net losses decrease to 51.3 billion Korean won ($37 million) in 2023 from 90.6 billion won in 2022.

The exchange saw a massive 97% boost in revenue, hitting 3.1 billion won. Also, its net operating loss shrank by 78% down to about 17 billion won. This uptick in Gopax’s financial health is thanks to a bullish sentiment in South Korea’s crypto markets, which are among the busiest in the world. Separately, the South Korean won has edged out the U.S. dollar to become the top fiat currency used in crypto trading as of November 2023, according to a Bloomberg report.

However, the financial health of Gopax was still impacted by its involvement with Genesis Global Capital. Genesis, which operated Gopax’s crypto custody service GoFi, suspended withdrawals in November 2022 following a liquidity crisis tied to the collapse of FTX.

This situation left Gopax owing its users approximately 63.7 billion won. But Binance’s intervention in February 2023, which involved acquiring a 72.26% stake in GOPAX, helped resolve these liquidity problems. However, the transition has faced regulatory delays in South Korea, primarily due to ongoing legal scrutiny of Binance in the U.S.

Steve Kim, Binance’s Director of Business Development for Asia-Pacific, said in a February roundtable that Binance is considering reducing its stake to become the second-largest shareholder to alleviate debt and compliance pressures on Gopax. Binance CEO Richard Teng also visited Seoul in March to engage with financial regulators, as reported by local media.

In December, GOPAX revealed progress in securing funds to normalize its operations and restore lost deposits. The revised plan was expected to help GOPAX renew its registration with the Financial Services Commission (FSC) in South Korea. However, the FSC has delayed approving GOPAX’s registration change for over a year due to concerns related to Binance’s legal challenges in the US.

South Korean authorities apply strict new rules to crypto businesses to minimize the risks of money laundering and market manipulation, which went into full effect last year.