As a small business owner myself, I understand how important it is to thoroughly research a company before partnering or getting involved with them in any way. That‘s why many entrepreneurs and crypto investors like myself have been curious about who exactly owns and runs Binance US.
In this comprehensive guide, I‘ll share my own analysis of Binance US‘s origins, leadership team, and relationship to its parent company Binance.
How Binance Became the World‘s Largest Crypto Exchange
To understand Binance US, you first need to understand Binance. The original Binance platform was founded in 2017 by Changpeng "CZ" Zhao, a Chinese-Canadian programmer who previously created high frequency trading software.
Within just 8 months, Binance became the world‘s largest cryptocurrency exchange by trading volume, processing over $3 billion in trades per day.
Binance‘s meteoric rise was due to a few key factors:
- Huge selection of altcoins – Binance offered over 500 different crypto assets, way more than competitors at the time.
- Low trading fees – Binance only charged an average fee of 0.1%, which was significantly less than other exchanges.
- Fast transaction processing – Binance‘s matching engine could handle 1.4 million transactions per second.
However, Binance‘s success led to increased scrutiny from regulators worldwide. In September 2017, China completely banned cryptocurrency trading and ICOs.
CZ moved Binance‘s operations to Japan briefly, before settling in crypto-friendly Malta in early 2018. However, Binance continued to face regulatory pressure in Europe and elsewhere.
Why Binance Launched a Separate US Exchange
With its growing global user base, Binance soon aimed to expand into the US market. However, they knew this would require full legal compliance to avoid scrutiny from American regulators.
That‘s why in June 2019, they announced the launch of Binance US – a separate cryptocurrency exchange aimed exclusively at US customers and fully compliant with US laws.
According to Binance CFO Wei Zhou, "The establishment of Binance US will undoubtedly increase our potential to support our mission of increasing the freedom of money globally and enable the US to become a financial hub around crypto."
As a small business owner, I understand the benefits of establishing a distinct legal entity to enter a highly regulated market like the US. This "regulatory arbitrage" allows Binance to continue servicing international users with minimal restrictions, while also accessing the valuable US market.
Let‘s take a closer look at who exactly owns and operates Binance US.
Binance US Company Structure and Leadership Team
Although Binance US originated from Binance, it operates as an independent business with its own corporate structure and leadership team.
- Parent Company: Binance US is a fully owned subsidiary of Binance Holdings Ltd., incorporated in the Cayman Islands.
- Legal Registration: Binance US is registered as BAM Trading Services in Delaware, and headquartered in San Francisco.
- Key Investors: Binance US has also received investments from other companies including BAM Trading Services, but has not disclosed all its investors.
Leadership: The Binance US executive team is made up of experienced professionals in cryptocurrency, compliance, and finance:
- CEO: Catherine Coley (former Head of XRP Institutional Liquidity at Ripple)
- CCO: Samuel Lim (former Associate Director at Deutsche Bank)
- Partners: Binance US works closely with partners like BAM Trading Services for technical development, customer support, KYC/AML implementation, and other services required to run the exchange.
So in summary, Binance US has its own corporate identity, leadership, and partners – separate from Binance itself.
This distinction is crucial, because Binance US operates under US jurisdiction. Binance US must comply with strict regulations from agencies like the SEC, FinCEN, and CFTC.
Operating independently gives them more flexibility to manage US regulations and licensure requirements.
But Binance Retains Strong Connections
Despite its distinct structure, it‘s important to note that Binance still has close ties to Binance US in the following ways:
- Binance provides the core trading platform and matching engine technology behind Binance US.
- Users can access Binance US via the main Binance website and mobile apps.
- Changpeng Zhao serves as an advisor to Binance US.
- Binance.com displays aggregated market data from Binance US.
So Binance US has access to the liquidity, technology, and resources of the larger Binance platform. At the same time, its independence enables regulatory compliance.
As a small business owner, I think Binance US made a smart strategic choice to balance rapid growth with legal compliance. This unique structure has allowed them to thrive among both international and US-based traders.
The Future of Binance‘s Global Expansion
With the successful launch of Binance US, I expect Binance to use a similar playbook as they aim to expand into other highly-regulated markets such as Europe and Asia.
We will likely see more region-specific Binance subsidiaries emerge across the globe. However, Binance will face continued scrutiny as regulators work to tame the "Wild West" nature of the crypto industry.
But by taking a proactive approach to compliance, Binance and Binance US have positioned themselves for long-term success.
Let me know in the comments what you think about Binance‘s global expansion strategy!