On May 27, Binance, the major stakeholder in the South Korean cryptocurrency exchange Gopax, sold the victims’ asset claims for less than half of what they were originally worth.
According to a Korea Economic Daily article, Gopax must pay consumers 70 billion won ($51.4 million) due to their involvement with the defunct crypto lender Genesis Global, which went bankrupt in November 2022. Gopax has already paid users 50% of the total.
Nevertheless, the remaining outstanding digital assets, which were valued at 35 billion at the November 2022 peak of the cryptocurrency market, are said to have increased to a total of 100 billion won at a Bitcoin price of $69,000.
According to a March Korean Times article, Gopax’s increased debt obligations have left the company in a “state of complete capital impairment.”
The company behind Gopax’s cryptocurrency custody service GoFi was Genesis, which stopped accepting withdrawals after discovering that it had a $1.2-billion exposure to the doomed Singaporean hedge fund Triangle Capital.
In an interview with Korean Economic Daily, a source said, “We paid with Bitcoin obtained by selling the Genesis claim at a low price to a third party, and we are delaying payment of the remaining 50% of the damage, saying we will pay it after the acquisition of Gopax is completed.”
Binance acquired a “meaningful” equity stake in Gopax in February 2023, bringing the cryptocurrency exchange back to the South Korean market. But, in February 2024, it also declared that it would reduce its ownership stake in the exchange.
However, the acquisition was put on hold by a lawsuit filed by the US Securities and Exchange Commission against Binance on June 7, 2023. This prompted the Financial Service Committee of South Korea to evaluate the agreement.
Genesis received $3 billion in bankruptcy court approval earlier this month to pay back its creditors using cash and Bitcoin.
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