Gopax Announces Decreased Net Loss of $37 Million Following Binance Takeover

Gopax, a leading cryptocurrency exchange in South Korea supported by Binance, reported a net loss of 51.3 billion Korean won ($37 million) for the fiscal year 2023, as indicated in the year-end financial report issued by its parent company, Streamy.

This amount reflects an improvement from the net loss of 90.6 billion won recorded in 2022. Gopax experienced a 97% increase in revenue year over year, driven by a recovering market sentiment.

GOPAX Reports Net Loss of $37 Million in 2023, Faces Challenges with GoFi-Linked Debt

Gopax cash flow statement Site: Streamy

On April 12, GOPAX published a financial statement that includes its balance sheets as of December 31, 2023, and December 31, 2022. The balance sheets also feature the associated statements of profit or loss, changes in equity, and cash flows for the respective years.

GOPAX reported a net loss of 51.3 billion Korean won ($37 million) for the fiscal year 2023. At the conclusion of the reporting period, the company’s current liabilities surpassed its current assets by KRW 66 billion, and total liabilities exceeded total assets by KRW 101 billion.

A significant portion of Gopax’s net losses originated from GoFi-related debt, linked to deposits that are currently inaccessible in Genesis Global Capital. Genesis, which managed Gopax’s crypto custody service GoFi, halted withdrawals in November 2022 due to a liquidity crisis tied to its involvement with FTX. The financial report indicates that GoFi still owes users 63.7 billion won.

Despite ongoing net losses, Gopax demonstrated positive year-over-year performance in 2023. The exchange reported a notable revenue increase, which rose by 97% to reach 3.1 billion won. Additionally, the net operating loss significantly decreased, contracting by 78% to around 17 billion won.

The revival of bullish sentiment in the South Korean cryptocurrency market contributed to Gopax’s improved financial outcomes in 2023. Importantly, South Korea continued to be one of the most active crypto markets worldwide, with the South Korean won surpassing the U.S. dollar as the primary fiat trading pair for cryptocurrencies in November 2023, according to Bloomberg.

Binance Grapples with Regulatory Delays and Financial Strain in Gopax Acquisition

Binance acquired Gopax at the close of 2022 to tackle the latter’s liquidity issues and to enhance Binance’s footprint in the South Korean market. However, financial regulators have been postponing the approval of Gopax’s revised virtual asset business report for over a year, hindering Binance’s market entry plans.

Binance’s choice to acquire Gopax was motivated by the latter’s failure to return funds to users following the FTX incident involving its virtual asset deposit service, ‘GoFi.’

Gopax Shareholders Source: Streamy

Binance became the majority stakeholder and assumed responsibility for GoFi’s debt, appointing Leon Singh Pung, the former head of Binance Asia Pacific, as CEO of Gopax. Despite submitting a report regarding the change in virtual asset business to the FIU, the decision on its acceptance has been repeatedly delayed.

Gopax subsequently replaced its CEO with former CEO Lee Jung-hoon and submitted another change report, but the FIU continued to postpone its decision.

In light of these challenges, Binance has begun discussions to reduce its ownership in Gopax to become the second-largest shareholder. This strategic decision aims to ease Gopax’s financial pressures and regulatory compliance challenges. Binance CEO Richard Teng even traveled to Seoul in March to engage with local financial regulators to address these issues.

According to the latest financial report, Binance remains the largest shareholder in Gopax, holding a 67.45% stake. However, a Binance spokesperson has indicated that there are no updates regarding any modifications to Binance’s ownership stake in Gopax.

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