The founder and CEO of Binance, the world’s largest cryptocurrency exchange by trading volume, Chanpeng Zhao (popularly known as CZ), has announced on 2nd September that its US division is planning to conduct an initial public offering (IPO) within the next three years, according to ‘The Information’.

“Binance.US is just going to do what Coinbase did,” CZ told The Information via a Zoom interview on Wednesday. He added further that its US platform is set to close on a large private fundraising round in the next 2 months which should reduce his control of the board. In the last year, Binance faced a huge profit from $800 million to $1 billion.

Konstantin Anissimov, executive director of crypto exchange CEX.IO, also noted that CZ’s “hints about potentially going public are not surprising.” However, he explained that while an IPO would “definitely be a win” for Binance.US or any other exchange, this is not something that just “happens” to a company.

A successful IPO would help to legitimize Binance.US in the eyes of American regulators and may even have a positive effect on the broader crypto industry. Because of several local regulatory restrictions, the global entity Binance impelled to launch a strictly American platform in September 2019. Besides, Americans were eventually striped from using Binance’s global platform in November 2020.

According to Konstantin Anissimov, for its U.S. arm to successfully go public, it may be forced to "structurally and substantially disassociate" from the larger Binance entity if it decides against completely opening its books.

After Coinbase’ public debut, Binance also thought of initial public offering the opportunities to access substantial capital, provide liquidity to the core team, develop banking relationships, establish new partnerships.

According to Mati Greenspan, founder of crypto analytics firm Quantum Economics remarked that “A listing on a public stock exchange represents a coming to the light for many companies. Especially in the U.S. and particularly in crypto where the regulatory landscape has been a particular barrier…Every crypto company that is traded on the big exchanges is a huge win for the entire sector.”

Joyashree Dey

CBW - External Analyst

INDIA