Binance Genesis Asset Sale Leaves Gopax Investors with Heavy Losses

by

As a researcher with a background in finance and experience in the cryptocurrency industry, I find Binance’s decision to sell Gopax asset claims at a deep discount to be not only disappointing but also detrimental to the affected investors. This action directly contradicts their previous commitment to fully compensate victims of the ‘GoFi’ service, leading to significant financial repercussions as cryptocurrency values continue to rise.

The asset claims of Gopax investors were sold by Binance for significantly less than their actual worth, worsening the financial strain of these investors. This move goes against Binance’s earlier promises to fully reimburse victims of the ‘GoFi’ service, resulting in substantial consequences as cryptocurrency prices keep climbing up.

Binance Sells Gopax Claims at Deep Discount

As an analyst, I’d rephrase it as follows: When Binance acquired Gopax, they promised investors to recover their lost funds worth around KRW 70 billion ($52 million) due to suspended fund withdrawals in the ‘GoFi’ service. However, instead of using Binance’s resources for compensation, they decided to sell off the asset claims at a significant discount. This action occurred during a period when cryptocurrency prices were rapidly increasing, thus amplifying the financial disparity between Binance and Gopax’s creditors. Consequently, Bitcoin (BTC) and other major cryptocurrencies experienced a surge in value, exacerbating the losses for Gopax’s affected investors.

As a researcher, I came across an intriguing piece of information from an anonymous tipster who shared details of a transaction with me, which was later reported by Hankyung, a local news outlet. According to this confidential source, Binance utilized the funds obtained through the discounted sale of Genesis claims to cover only the initial 15 billion won worth of payments. However, subsequent compensations were delayed, and the commitment to meet remaining promises post-acquisition remains outstanding. This implies that a significant portion of the debt has yet to be resolved.

U.S. Court Approves Genesis Bankruptcy Plan

As a researcher, I’ve come across an intriguing development in the crypto world recently. Last week, a U.S. court gave its approval to Genesis’ bankruptcy compensation plan. Genesis, which is a virtual asset deposit service associated with Gopax, has committed to returning approximately 77% of the $3 billion in bond funds to its creditors. On the other hand, Gemini, another cryptocurrency exchange impacted by Genesis’ issues, intends to repay 97% of the affected customers using similar compensation funds.

The difference between the values has drawn criticism from numerous sources, including Sunil Kavuri, a prominent creditor in the FTX creditor group. Kavuri criticized the method of selling assets at discounted prices that considerably undervalued the assets’ current market worth, providing examples where these sold assets subsequently saw substantial price increases.

As an analyst, I’ve observed that Binance’s approach to handling asset claims at Gopax has not only resulted in financial losses for investors but also instilled a sense of mistrust. The company’s board, comprised of Binance representatives, has faced accusations of being vague about the origin of the funds used to reimburse investors. This ambiguity, combined with the 50% discount offered on sold Genesis claims, has heightened investor frustrations.

As a researcher, I’ve come across some intriguing news regarding the Financial Services Commission (FSC) of South Korea. They are presently examining Gopax’s executive change report, which includes the addition of Binance employees as directors. The FSC is also requesting further details from Binance concerning accusations of money laundering and other regulatory issues. This examination takes place during a crucial period for the cryptocurrency sector, with heightened volatility and regulatory challenges on a global scale.

Vanguard Files Specialized Fund With Special Mention of Digital Currency

Read More

2024-05-28 00:29