Bitrabo Editorial
Reports from local media indicate that Binance, the world’s largest cryptocurrency exchange, is caught up in a controversy involving the unauthorized sale of crypto lender Genesis’ claims and mishandling victims’ assets.
The accusations suggest that Binance may have used these assets to cover debts owed by Gopax, a South Korean crypto exchange, potentially concealing significant losses running into billions of won.
Allegations of Shifting Debt Burden onto Victims
It is claimed that Binance had initially promised to compensate victims affected by the suspension of fund withdrawals from the virtual asset deposit service ‘GoFi’ for their losses.
Instead of utilizing its own funds for compensation, Binance allegedly bought discounted shares of Gopax, making it the largest shareholder of the company. It has been revealed that Binance compensated the victims by selling their asset claims at prices lower than face value, effectively burdening them with the debt.
According to reports, this transaction has severely impacted the victims as the prices of virtual assets, including Bitcoin, surged after the sale, worsening Gopax’s losses. Gopax’s debt now stands at around 100 billion won, equivalent to approximately $73 million.
Despite Binance’s commitment to compensate damages using its Industrial Recovery Fund (IRI), only a portion of the losses has been addressed, with the rest postponed until the Gopax acquisition was finalized.
Suspicions of Money Laundering and Illegal Activities
The acquisition of Gopax by Binance in February 2023 has come under scrutiny, with concerns raised about its fairness and legality. South Korean financial authorities have initiated investigations into the transaction, focusing on potential money laundering and other illicit activities.
The Financial Services Commission is currently examining Gopax’s management change report to evaluate the acquisition’s implications and compliance with regulatory requirements.
Meanwhile, Gopax has remained silent on the issue, withholding any official statements regarding the sale of Genesis claim rights.
Critics argue that Gopax’s call for GoPay investors to convert their debts into stock investments is an effort to shift the debt responsibility onto victims rather than holding Binance accountable.
As the investigations progress, Binance is under mounting pressure to clarify the situation regarding the alleged mishandling of victims’ assets and the sale of Genesis claims.
Authorities are committed to curbing illegal activities and safeguarding investor interests in the cryptocurrency market. The outcomes of these investigations will have significant implications for Binance, Gopax, and the overall crypto ecosystem in South Korea.
Currently, Binance’s native token BNB is trading at $598, showing a nearly 2% decline in the last 24 hours and a 3% decrease over the past week after unsuccessful attempts to consolidate above the $600 mark.
Featured image from Shutterstock, chart from TradingView.com