Binance’s Genesis Asset Sale Triggers Significant Losses for Gopax Investors: Impact on GOPAX Token (GOPAX)

  • Binance sells Gopax asset claims at steep discounts, igniting investor outrage and prompting regulatory review in South Korea.
  • This sale contradicts Binance’s earlier promise to compensate GoFi victims fully.
  • Binance committed to compensating investors for KRW 70 billion ($52 million) in losses caused by the GoFi service suspension.

Binance’s controversial sale of Gopax asset claims at steep discounts has sparked investor outrage and regulatory scrutiny in South Korea.

Binance Sells Gopax Claims at Deep Discount

When Binance took over Gopax, it assured investors of recovering their lost funds totaling approximately KRW 70 billion ($52 million) due to halted fund withdrawals in the ‘GoFi’ service. However, instead of utilizing its funds for compensation, Binance opted to sell the asset claims at a steep discount. This decision came at a time when cryptocurrency prices were climbing, thereby widening the financial gap suffered by creditors. Following this sale, Bitcoin (BTC) and other major cryptocurrencies saw a surge in value, further inflating the losses for Gopax’s creditors.

U.S. Court Approves Genesis Bankruptcy Plan

Interestingly, a U.S. court approved Genesis’s bankruptcy compensation plan last week. Genesis, a virtual asset deposit service linked with Gopax, has pledged to return 77% of around $3 billion in bond funds to creditors. In contrast, Gemini, another cryptocurrency exchange affected by Genesis’ issues, plans to repay 97% of its customers impacted by the bankruptcy using similar compensation funds.

This disparity has prompted criticism from various quarters, including Sunil Kavuri, a leading creditor in the FTX creditor community. Kavuri condemned the practice of selling assets at discounted rates that significantly undervalue the assets’ current market prices, citing instances where assets sold for fractions of their value appreciated significantly after that.

Conclusion

The manner in which Binance handled the asset claims has not only resulted in financial losses but also fostered distrust among Gopax investors. The company’s board, which includes representatives from Binance, has been accused of being opaque about the sources of funds used to compensate investors. This secrecy, coupled with the 50% discount on the sold Genesis claims, has intensified frustrations among investors.

Moreover, the Financial Services Commission (FSC) of South Korea is currently reviewing an executive change report from Gopax, which includes the appointment of Binance personnel as directors. The FSC is also seeking additional information from Binance concerning allegations of money laundering and other regulatory concerns. This scrutiny comes at a critical time as the cryptocurrency market faces increased volatility and regulatory challenges globally.

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Gideon Wolf
Gideon Wolfhttps://en.coinotag.com/
GideonWolff is a 27-year-old technical analyst and journalist with extensive experience in the cryptocurrency industry. With a focus on technical analysis and news reporting, GideonWolff provides valuable insights on market trends and potential opportunities for both investors and those interested in the world of cryptocurrency.
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