Binance Sells Gopax’s Genesis Asset Rights at Steep Discount, Leading to Significant Losses
Binance, the largest shareholder of the South Korean cryptocurrency exchange Gopax, sold the asset claims of Gopax victims at less than half their face value on May 27.
The discounted sale has led to substantial financial losses for investors, contradicting Binance’s earlier promise to fully compensate victims of the virtual asset deposit service ‘GoFi.’ The sale occurred amid rising cryptocurrency prices, exacerbating the losses for Gopax’s creditors.
When Binance acquired a majority stake in Gopax, it committed to compensating investors for the approximately KRW 70 billion (around $52 million) lost due to suspending fund withdrawals in the ‘GoFi’ service. Instead of using its funds to cover these losses, Binance sold the victims’ asset claims at extremely discounted rates.
[Exclusive] Binance, after acquiring Korean exchange GOPAX, involved in 'debt rollover'… Evidence of concealing losses amounting to hundreds of billions of won.https://t.co/lLbFrNCI1K
Although Genesis Capital's bankruptcy compensation plan has been approved, unlike Gemini,…
— 블루밍비트 (@bloomingbit_io) May 27, 2024
Following the sale, the price of major cryptocurrencies, including Bitcoin, surged, further increasing the financial gap. The debt to GoFi has now increased to an estimated KRW 100 billion (around $75 million), excluding existing repayments.
An anonymous source familiar with the transaction disclosed to the local news agency Hankyung that Binance offloaded the claims as part of its strategy to manage Gopax’s liabilities.
“Binance initially promised to cover the Gopax victims’ funds with its Industrial Recovery Fund (IRI), but IRI was only used to pay the first damage (about 15 billion won),” the source said. “From the second payment
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