Gopax, a major South Korean cryptocurrency exchange backed by Binance, reported a net loss of 51.3 billion Korean won ($37 million) for the fiscal year 2023, an improvement from the net loss of 90.6 billion won in 2022. The company’s revenue grew by 97% year over year, driven by recovering market sentiment. The financial statement released by Gopax’s parent company, Streamy, also revealed that the company’s current liabilities exceeded its current assets by 66 billion won, and total liabilities exceeded total assets by 101 billion won. Most of Gopax’s net losses were due to GoFi-linked debt, as deposits were stuck in Genesis Global Capital.
Despite the challenges faced with GoFi-linked debt, Gopax showed positive year-over-year performances in 2023. The exchange reported a 97% increase in revenue, reaching 3.1 billion won. The net operating loss also decreased significantly, contracting by 78% to around 17 billion won. The bullish sentiment in the South Korean cryptocurrency market played a key role in Gopax’s improved financial results in 2023. South Korea remained 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, which acquired Gopax at the end of 2022 to address liquidity challenges and expand its presence in the South Korean market, has been grappling with regulatory delays and financial strain in the acquisition. Financial authorities have been postponing the acceptance of Gopax’s change of virtual asset business report for over a year, affecting 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 is the majority shareholder in Gopax and has taken on the responsibility for GoFi’s debt.
In response to the challenges faced with regulatory delays and financial strain, Binance has initiated discussions to reduce its shares in Gopax to become the second-largest shareholder. This strategic move aims to alleviate Gopax’s financial burdens and regulatory compliance pressures. Binance CEO Richard Teng even traveled to 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. However, there are no updates regarding any changes to Binance’s ownership stake in Gopax at this time.
Overall, Gopax’s financial statement for 2023 reflects an improved performance compared to the previous year, despite facing challenges related to GoFi-linked debt. The company’s revenue saw significant growth, driven by the resurgence of bullish sentiment in the South Korean cryptocurrency market. Binance’s acquisition of Gopax, aimed at addressing liquidity challenges and expanding its presence in South Korea, has been hindered by regulatory delays and financial strain. However, Binance is actively working to mitigate these challenges by considering reducing its shares in Gopax. The cryptocurrency exchange industry in South Korea continues to evolve, with companies like Gopax adapting to market conditions and regulatory requirements to ensure future growth and success.
