The cryptocurrency exchange Gopax is currently facing a severe crisis due to the recent surge in Bitcoin prices. With Bitcoin’s price skyrocketing, Gopax’s debt has increased significantly, putting the company’s financial stability at risk. Gopax had already been burdened with debt from its past involvement with Genesis Global Capital, a custody service provider for virtual assets, which ceased withdrawals following the collapse of FTX in 2022.
As of the end of 2022, Gopax’s debt stood at 566 billion won, reflecting the value of the virtual assets collected through its Gopay service. However, with the recent surge in Bitcoin prices, this debt is estimated to have nearly doubled to around 1 trillion won. In response, Gopax has attempted negotiations with Gopay bondholders to convert the owed principal into stocks to reduce debt and improve its financial structure. However, it has yet to secure sufficient approval from users for this plan.
Furthermore, Gopax’s majority shareholder, Binance, has been unable to obtain approval for a change in business operators from financial authorities. The authorities’ reluctance stems from Binance’s past fines for violations such as money laundering in overseas operations, casting doubt on its activities in Korea. This regulatory uncertainty has halted additional investments into Gopax.
Financial authorities have warned that unless Gopax can demonstrate its financial soundness, it may lose its position as a won-denominated exchange. This situation underscores the challenges posed by the recent surge in Bitcoin prices for Gopax, exacerbating its debt and financial difficulties. The ongoing negotiations and regulatory hurdles highlight the volatility and tensions within the cryptocurrency market. How Gopax will overcome these challenges and restore its position in the cryptocurrency market remains uncertain.
