South Korea’s Gopax Exchange reports reduced losses, revenue growth in 2023

Category: Asia Crypto Fintech

Gopax, a South Korean cryptocurrency exchange backed by Binance, has recorded a net loss of 51.3 billion Korean won (€34.8 million) in 2023, marking a notable improvement from a net loss of 90.6 billion won (€61.6 million) in 2022.  

The trading platform, one of South Korea‘s five fully licensed crypto exchanges, showcased robust year-over-year growth. Its revenue surged by an impressive 97% to reach 3.1 billion won (€2.1 million), while its net operating loss narrowed substantially by 78%, amounting to approximately 17 billion won (€11.5 million).  

Market dynamics

Gopax’s strengthened performance coincided with a surge in bullish sentiment in 2023 in South Korea, which remains one of the most active cryptocurrency markets globally. According to a Bloomberg report in November 2023, the South Korean won surpassed the U.S. dollar as the leading fiat trading pair in crypto.  

However, a significant portion of Gopax’s losses in 2023 were attributed to funds tied up in Genesis Global Capital. This entity halted withdrawals in November 2022 due to a liquidity crisis associated with its involvement with FTX. Genesis operated Gopax’s crypto custody service, GoFi, which still owes users 63.7 billion won (€43.3 million) based on the financial report.  

Binance acquisition challenges  

Binance acquired Gopax in February 2023 to address its liquidity concerns and gain a foothold in the South Korean market. Nevertheless, regulatory hurdles have hindered the transfer of ownership to Binance, primarily due to concerns regarding Binance’s legal issues in the U.S.   

In February, a Binance official disclosed during a roundtable discussion that the exchange is exploring options to reduce its shares in Gopax, aiming to become the second-largest shareholder. This move seeks to alleviate Gopax’s debts and compliance pressures.  

Future outlook

Despite the challenges, the exchange’s improved financial performance and ongoing discussions with regulators signal potential strategies to navigate regulatory complexities and strengthen its position in the South Korean cryptocurrency market.