Imagine if a stock trading platform emerged to become the juggernaut brokerage handling most of the world‘s volume within a few short years. That‘s what Binance accomplished in the crypto space.
Since launching in 2017, Binance has exploded to dominate digital asset trading:
- Over 120 million users
- Average daily volume of $30 billion
- More than 500 cryptocurrencies listed
Yet Binance inhabits a legal gray zone as regulators play catchup. Its meteoric expansion also bears the hallmarks of its founder Changpeng Zhao‘s ambition. So what is driving crypto‘s lead exchange to such heights? This background helps make sense of Binance‘s significance.
CZ Laid the Foundations for Binance with Previous Crypto Experience
The man steering Binance sits at the heart of its rise. Before starting Binance, Changpeng Zhao (CZ) gained crucial knowledge of the emerging crypto sector.
His expertise stems from directing development at early blockchain startup Blockchain.info for one year. CZ then spent a formative stretch leading engineering at Chinese exchange OKCoin.
Once seeing the potential of cryptocurrency firsthand, CZ leapt into founding an exchange tailored for an exploding consumer base. He launched Binance in July 2017 in China, before getting chased out by the country‘s crypto restrictions months later.
This early regulatory evasion foreshadowed the legal quagmires that would accompany stunning volume growth still to come on Binance.
| Date | Milestone |
|---|---|
| July 2017 | Binance Founded |
| Sept 2017 | Forced to Relocate from China to Japan |
| June 2017 | BNB Token Launch |
| 2018 – Present | Regulatory & Legal Issues Emerge |
BNB Token Propels Binance into the Stratosphere
The creation of Binance‘s proprietary crypto BNB marked a breakthrough validating its business model. Initially sold to finance startup costs, BNB developed into an engine of growth for Binance and harnessed network effects.
Today BNB floats among the top 5 cryptos globally, trailing only stalwarts Bitcoin and Ethereum in total trades:
- $80+ billion market capitalization
- 80 million BNB tokens in circulation
- Used by travel, gaming, casino sites beyond just Binance
The runaway success of BNB cemented Binance and CZ as undisputed market leaders during 2018‘s historic crypto bull market.
Meanwhile the basics of Binance exchange took off exponentially too:
- $30 billion average daily volume
- 500+ crypto coins supported
- Lower trading fees when paying in BNB
Binance had created a booming digital asset economy fueled by skyrocketing consumer demand.
Regulatory Woes Mount as Binance Seeks Global Domination
Rapid success fueled Binance‘s global expansion ambitions while regulatory infrastructure lagged far behind. This allowed CZ‘s company to opportunistically target jurisdictions lacking crypto compliance regulations.
By registering corporate entities everywhere from Singapore to Jersey to the Cayman Islands, Binance maintained fluid operations despite heat from oversight bodies. For example, Binance.US was created as a separate legal entity when the main platform blocked U.S.-based IP addresses.
But by 2021, Binance‘s free rein was finally being threatened by coordinated government response to alleged malfeasance:
- Anti-Money Laundering violations – Inadequate customer ID checks opened the door to potential money laundering
- Tax Evasion – Questions raised about Binance deliberately hiding assets and ownership structures offshore
- Investor Deception – Leaked documents show CZ created a corporate framework aimed at deceiving regulators
Multiple investigations now target Binance across jurisdictions like the U.S., Japan, Germany, and more. Despite legal distractions, the exchange presses forward assertively, with its Performing diverse crypto products and services.
Binance Leads Crypto with Acquisitions and Venture Investing
Flush with cash from crypto trading volumes, Binance strategically acquired key players and expanded offerings:
| Year | Investment | Type | Price |
|---|---|---|---|
| 2018 | Trust Wallet | Mobile wallet | Undisclosed |
| 2019 | Binance JEX | Futures/Options Exchange | Merged entities |
| 2020 | CoinMarketCap | Crypto data/pricing | $400 million |
| 2022 | Forbes Media | Iconic publisher | $200 million |
Trust Wallet and CoinMarketCap boosted Binance‘s consumer reach, while Binance JEX expanded into crypto derivatives. CZ even grabbed equity in venerable American publisher Forbes after initial criticism of Binance‘s practices.
Beyond direct acquisitions, the company actively invests in other crypto startups advancing decentralized blockchain ecosystems aligned with Binance priorities.
This vertical integration helps the mothership exchange stay diversified across hot crypto sectors.
Conclusion – Binance Stands Atop the Crypto Economy It Helped Build
Like him or not, CZ executed his vision by leveraging crypto‘s emerging potential at the right time. He built an exchange matching blockchain‘s underlying decentralization and capitalized on a historically fertile period.
Binance still faces existential threats from global regulation seeking to limit its dominance. But CZ stands poised to battle for his company‘s interests as greater adoption seems guaranteed.
Perhaps we can expect this empire only continues expanding its reach to shape the future of digital finance in the 2020‘s.
