In 2023, Binance sold Gopax clients’ claims against Genesis Global for less than half their nominal value, according to Hankyung, citing its own sources.
In February 2023, Binance acquired a controlling stake in the troubled South Korean exchange Gopax. A condition of the purchase was to cover the losses of GoFi product users, who suffered due to the bankruptcy of Genesis Global.
The parent company of Genesis Global, Digital Currency Group, was the second-largest shareholder of the exchange.
Binance used funds from the “Industry Recovery Initiative,” to which the world’s largest exchange pledged $1 billion, for the acquisition of Gopax. Compensation for GoFi users was also expected to come from this source.
However, Hankyung’s sources claim that only the first round of claims settlement was conducted this way. For the second round, Binance used proceeds from selling claims against Genesis at a discount of over 50%.
GoFi clients lost a total of 70 billion won, or $57 million at the time, due to the bankruptcy of the lending platform. Their claims have been compensated by approximately 50%.
Since then, digital assets have significantly increased in value, and the amount of remaining claims against Gopax now stands at approximately 100 billion won.
In May, it was revealed that Genesis, by court order, will distribute $3 billion in fiat and cryptocurrencies among creditors. This will cover about 77% of the firm’s total obligations. Gopax did not comment on this, as they no longer held claims against the platform, which were sold without clients’ knowledge.
Binance remains committed to compensating users. However, journalists noted that the purchase agreement lacks a timeline for settling the platform’s obligations.
Earlier, the New York Attorney General’s office (OAG) tripled the alleged fraud amount to over $3 billion in the case against Genesis, Gemini, and Digital Currency Group.