Gopax, a popular South Korean cryptocurrency exchange, revealed a net loss of 51.3 billion Korean won ($37 million) for the fiscal year 2023, showing an improvement compared to the net loss of 90.6 billion won in 2022. The company’s revenue grew by 97% year over year, reflecting recovering market sentiment. Most of Gopax’s losses were attributed to GoFi-linked debt, as deposits were stuck in Genesis Global Capital, which operated Gopax’s crypto custody service GoFi. Genesis suspended withdrawals in November 2022 due to a liquidity crisis associated with FTX, leaving GoFi owing users 63.7 billion won. Despite the continued net losses, Gopax saw positive year-over-year performances in 2023, with revenue surging by 97% to 3.1 billion won and a significant decrease in net operating loss by 78% to around 17 billion won.
The resurgence of bullish sentiment in the South Korean cryptocurrency market contributed to Gopax’s improved financial results in 2023. South Korea stood out as one of the most active crypto markets globally, with the South Korean won surpassing the U.S. dollar as the primary fiat trading pair for cryptocurrencies in November 2023. Binance acquired Gopax at the end of 2022 to address the liquidity issues and extend its presence in the South Korean market. However, regulatory delays have hindered Gopax’s change of virtual asset business report for over a year, delaying Binance’s plans for market entry. Binance’s decision to acquire Gopax was driven by the latter’s inability to return funds to users following the FTX incident involving its virtual asset deposit service, GoFi. Binance became the majority shareholder and took on the responsibility for GoFi’s debt, appointing a new CEO, Leon Singh Pung, to oversee Gopax.
Despite submitting multiple reports on the change in virtual asset business to the Financial Intelligence Unit (FIU), Gopax faced continuous delays in the acceptance of these reports. In response to these challenges, Binance initiated discussions to reduce its shares in Gopax, aiming to become the second-largest shareholder. This move would alleviate Gopax’s financial burdens and regulatory compliance pressures. Binance’s CEO, Richard Teng, visited Seoul in March to engage with local financial regulators to address these concerns. As of the latest financial report, Binance remains the largest shareholder in Gopax, holding a 67.45% stake, with no updates regarding any changes to Binance’s ownership stake in Gopax provided by a Binance spokesperson.
With Gopax’s financial statement for 2023 revealing a net loss of $37 million, the company faces challenges related to GoFi-linked debt, with deposits stuck in Genesis Global Capital. Despite the setbacks, Gopax showed positive year-over-year performances in 2023, with a notable increase in revenue and a significant decrease in net operating loss. The resurgence of bullish sentiment in the South Korean crypto market has contributed to the improved financial results of Gopax. Binance’s acquisition of Gopax was aimed at addressing liquidity challenges and expanding its presence in the South Korean market, but regulatory delays have hindered these plans. Discussions to reduce Binance’s shares in Gopax are underway to alleviate financial burdens and regulatory pressures on the exchange. Binance’s efforts to engage with local regulators in Seoul demonstrate a commitment to addressing concerns and ensuring compliance within the South Korean market.
