Binance’s Gopax Exchange Slashes Losses with 97% YoY Revenue Boost

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Gopax Exchange, the South Korean cryptocurrency exchange backed by Binance has demonstrated resilience and significant growth in its financial performance for 2023 as it posted a 97% year-over-year (YoY) improvement from its 2022 figures.

According to the year-end financial report from Streami, Gopax’s parent company, the exchange reported a net loss of 51.3 billion Korean won ($37 million) in 2023, a notable improvement from its net loss of 90.6 billion won in the previous year.

Surge in Gopax Exchange Revenue and Operational Efficiency

One of the key highlights of Gopax’s performance in 2023 is its remarkable revenue growth, which surged by 97% year-over-year to reach 3.1 billion won. The exchange also substantially reduced its net operating loss by 78%, narrowing it down to about 17 billion won.

The positive results achieved by Gopax come amidst a bullish sentiment in the South Korean cryptocurrency market throughout 2023. South Korea is known for its active participation in the crypto space with stringent crypto regulations. The country witnessed significant developments including the South Korean won surpassing the U.S. dollar as the largest fiat trading pair in crypto. This occurred in November 2023, according to a Bloomberg report.

Gopax’s Regulatory Challenges

However, Gopax faced challenges, particularly stemming from its involvement with Genesis Global Capital. The suspension of withdrawals by Genesis in November 2022 arising from its liquidity crisis linked to its association with FTX, significantly impacted Gopax’s financials.

The financial report indicates that Gopax’s losses in 2023 were largely attributed to funds entangled in Genesis, particularly through its crypto custody service, GoFi, which still owes users 63.7 billion won.

Binance Legal Issues and Gopax

In February 2023, Binance acquired Gopax in a bid to address its liquidity issues and gain entry into the South Korean market. However, Binance is yet to gain full ownership despite the acquisition due to delays from local financial authorities, as a result of lingering concerns over Binance’s legal issues in the U.S.

To mitigate Gopax’s debts and compliance pressure, Binance has engaged in discussions to potentially reduce its shares and settle for the position of the second-largest shareholder. In the meantime, based on the latest financial report, Binance remains the largest shareholder in Gopax, holding a 67.45% stake.

Binance CEO Richard Teng’s visit to Seoul in March to meet with financial regulators is viewed as part of the exchange’s commitment to resolving regulatory hurdles.

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