Key Takeaways:
- Gopax sold its users’ deposit claims at half their face value due to exposure to the collapsed Genesis Global, resulting in a $51.4 million debt.
- The remaining assets’ value surged from 35 billion won to 100 billion won, driven by rising Bitcoin prices.
- Gopax delayed paying the remaining 50% owed to users, pending completion of Binance’s acquisition, which was stalled by a U.S. SEC lawsuit.
Gopax, a major South Korean cryptocurrency exchange majority-owned by Binance, sold its users’ deposit claims at half their face value in August 2023.
This move was in response to its exposure to the collapsed crypto lending firm Genesis Global, resulting in a debt of 70 billion South Korean won ($51.4 million) to its users.
Binance, the largest shareholder of Gopax, recently sold the asset claims of Gopax victims at less than half their face value. #Binance #Genesis #Gopaxhttps://t.co/QK5xDanJBu
— Cryptonews.com (@cryptonews) May 27, 2024
Gopax paid out 50% of this amount to users. The remaining assets, valued at 35 billion won at the lowest point of the crypto market in November 2022, have surged to 100 billion won due to rising Bitcoin prices.
Genesis Global, which halted withdrawals due to a $1.2 billion exposure to the failed hedge fund Three Arrows Capital, also operated Gopax’s crypto custody service GoFi.
Gopax delayed paying the remaining 50% of the owed amount, promising to pay it after Binance’s acquisition of Gopax is completed.
Binance acquired a significant equity position in Gopax in February 2023, marking its return to the South Korean market.
However, a U.S. Securities and Exchange Commission lawsuit against Binance by June 7, 2023, stalled the acquisition, leading to a review by South Korea’s Financial Service Committee.
SEC case against #Binance delays S. Korea GOPAX acquisition deal ⏸️
— CryptoSavingExpert ® (@CryptoSavingExp) June 11, 2023
Full story 👇https://t.co/K58hgQEX26
In a related development, Genesis secured a $3-billion approval in U.S. bankruptcy courts to return cash and cryptocurrency to its creditors, despite an objection from its parent company, Digital Currency Group (DCG).
Genesis will repay creditors around $3 billion in digital assets and cash under the approved Chapter 11 liquidation plan, based on current market values.
— Bitcoin News (@BitcoinNewsCom) May 18, 2024
DCG's proposal, tying repayments to cryptocurrency values at Genesis's bankruptcy filing in January 2023, failed in court. pic.twitter.com/rphGxXcuzM
This decision left DCG with no recovery from Genesis’ bankruptcy proceedings.
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