Negotiations between Megazone and Binance regarding the acquisition of domestic won virtual asset exchange Gopax are at an impasse. Binance, the largest shareholder of Gopax, attempted to transfer its equity to Megazone, but negotiations have become difficult due to the recent surge in the price of Bitcoin, which has left Gopax's Gopay debt unresolved.
According to the virtual asset industry on the 24th, the negotiations for the sale of Gopax between Megazone and Binance have not progressed since last October. Megazone stated that no agreements have been finalized regarding the acquisition discussions with Gopax and that they are still ongoing, but there are currently no substantive discussions or future plans in place. In the meantime, Megazone and Binance have had no separate exchanges, leading industry analysts to suggest that Megazone has effectively abandoned the acquisition.
Reports of Megazone's difficulties in acquiring Gopax have been circulating for several months. The biggest obstacle for Megazone, which aimed to expand its business operations into various information and communication (IT) subsidiaries as well as the blockchain sector, was the 'Gopay' debt. Gopay is a fixed virtual asset deposit service from Gopax, where investors deposit their cryptocurrencies with the exchange and receive their principal and interest after a certain period.
However, following the collapse of global virtual asset exchange FTX in 2022, Genesis, a virtual asset lending company that was actually managing Gopay's deposited assets, decided to suspend principal repayments. Gopax has been negotiating with Genesis to reclaim assets for Gopay investors, but ultimately, after Genesis's bankruptcy, Gopax took on the debt. Therefore, to sell Gopax's equity, an agreement must be reached with creditors regarding the amount of Gopay debt.
The problem is that the price of Bitcoin has soared in the meantime. Gopax asserts that it will repay the remaining unpaid amounts in cash, based on a price of 28 million won per Bitcoin at that time. However, the Gopay creditors are demanding the return of the Bitcoin that was deposited at that time. According to the global market site CoinMarketCap, the price of Bitcoin as of 3 p.m. that day was around 137.5 million won.
If Megazone withdraws from the acquisition negotiations, Gopax will be unable to implement the change of major shareholder that financial authorities are demanding. The likelihood of a new acquirer emerging is extremely low, and the Gopay debt will undoubtedly be a hindrance in the acquisition negotiation process. Gopax submitted a business registration amendment report to change its largest shareholder to Binance last March, but it is still pending, with the Financial Supervisory Service requiring Binance to reduce its equity in Gopax to below 10%. According to the Financial Supervisory Service's electronic public disclosure, as of the end of last year, Binance held a 67.45% stake in Gopax.
Additionally, Gopax has applied for a virtual asset service provider (VASP) renewal report and received an on-site inspection up until last week. The on-site inspection ended without any particular issues, and what remains is the approval of the report by the financial authorities. If the authorities refuse to approve the report due to issues with the change of major shareholders, Gopax will proceed with liquidation, making debt repayment even more difficult. An industry insider noted, "Gopax has fulfilled all legal obligations it can, and what remains is whether the authorities will grant their approval. Fortunately, Binance has the willingness to repay Gopax’s debt and is communicating with the authorities, so there is still a glimmer of hope."