• Binance is in the process of acquiring Gopax, with customers having $471 million of funds locked in Genesis Trading.
• If the acquisition falls through, investors could face a loss of $471 million.
• Genesis is reportedly looking to file for bankruptcy, further decreasing the chances of recovering the funds.
Binance, the world’s largest cryptocurrency exchange, is in the process of acquiring Gopax, a South Korean crypto exchange. Unfortunately, Gopax has about $471 million of customers’ funds locked in Genesis Trading. This has put Gopax investors at risk of a significant loss should the acquisition by Binance fail.
Binance reportedly completed due diligence for the acquisition of Gopax on Jan. 2, and purchased a stake in Gopax’s largest shareholder, Lee Jun-hang, who owns 41.2% of the company. This step is part of an effort to acquire Gopax, which is currently the third-largest crypto exchange in South Korea.
However, Gopax is facing a shortfall of 600 billion won (approximately $471 million) from its deposits in Genesis Trading. The funds were reportedly locked in Genesis before it suspended redemption on Nov. 16, 2022 due to the FTX fallout. This has left Gopax customers with little to no chance of recovering any of their funds, should the acquisition by Binance fail.
Chances of redeeming the funds locked in Genesis are further decreasing as the crypto lender is reportedly looking to file for bankruptcy. This would mean a complete loss of the funds for Gopax customers, and a major financial blow for the exchange.
At this point, the future of Gopax’s customers’ deposits is uncertain. However, if the negotiations for Binance’s acquisition of Gopax shares fail, there is a high possibility that the damage to GoFi investors will become a reality. It remains to be seen how the situation will play out, but the stakes are high for both Gopax and its customers.