09.12.2021

A division of the world’s largest cryptocurrency exchange will hold an IPO within three years

The founder and CEO of the largest crypto exchange Binance, Changpeng Zhao, said yesterday that the American division of the company plans to go public within the next three years.

Accordingly, the company will become public, and its shares will be traded on the world’s stock markets. Recall that the shares of the American exchange Coinbase are already traded on the NASDAQ after the initial public offering in April 2021. Zhao admitted that Binance will follow in the footsteps of the Coinbase exchange and go to an IPO in order to improve relations with financial regulators.

Recall that recently, Binance has received a lot of criticism from regulators from several regions of the world. Changpen even had to make concessions – on the eve of the exchange rules, there was a mandatory confirmation of the identity of account holders in order to counteract the financial flows of criminals and money laundering.

That is, users of the cryptocurrency platform must prove their identity by presenting documents such as a passport or driver’s license. If they do not do this, their options – for example, conducting transactions – will be limited. Thus, the platform is insured against money laundering in large volumes using the exchange. After all, if some people want to exchange a large amount of coins on the platform, they will be forced to confirm their identities. It will be impossible to use new accounts.

Cryptocurrency companies go public

Binance does not have a central headquarters, in addition, Zhao said earlier in an interview that the company’s employees work in different countries of the world. However, in the United States, the launch of the trading platform back in 2019 was disrupted due to opposition from financial regulators. Binance must meet their requirements if it wants to add Americans to its client list.

At the moment, the American division of Binance.US operates in most, but not all, states of the United States. Residents of the states of Connecticut, Hawaii, Idaho, Louisiana, New York, Texas and Vermont cannot legally use the trading platform.

Binance.US cryptocurrency exchange

Binance.US

According to the founder of Quantum Economics, Mati Greenspan, a successful IPO will help legitimize Binance.US in the eyes of American regulators and may even have a positive impact on the entire crypto industry as a whole. Here is his remark, in which the expert shares his attitude to what is happening.

For many companies, listing on the stock exchange is the day. Especially in the US and especially in the cryptocurrency space, where bad relations with regulators are the main stumbling block. Every cryptocurrency company traded on major exchanges will be a huge win for the entire industry.

Binance.US Zhao Cryptocurrency Exchange

Binance CEO Changpeng Zhao

For the executive director of the CEX-IO platform, Konstantin Anissimov, Changpen’s desire to go to the IPO was quite expected. Here is a quote of him from an interview with Decrypt reporters , in which he comments on what is happening.

After the debut of Coinbase, probably every major player in the cryptocurrency industry will ask themselves the question, “Should we do this too?”

An IPO helps a company reach a new level, raise a significant amount of capital, improve its image, and so on. When an organization grows to a certain level, listing its shares on the stock exchange seems like a logical step. However, not everything is so simple. Anissimov noted that the IPO “does not happen overnight .

Before the shares of the company begin to trade, it is necessary to correctly follow the algorithm of actions on the way to the IPO. This process forces the company to become more transparent: it must disclose information about its financial activities, compensation and problems. It’s like a black box. Should Binance open it?

In order for the American division of Binance to go through an IPO, he said, it may have to “structurally separate” from the main exchange ecosystem.

Due to recent regulatory pressure Binance has faced, the first option – opening financial statements – requires a lot of legal work from the company. And perhaps even abandoning some of the usual business practices. The second option – detachment – makes Binance.US a much less attractive option for investors to invest.

According to Changpeng, the estimated date for the IPO should be planned within the next three years. Before that, his company has a long job of weighing all the pros and cons of listing on the stock exchange. And only when the top management of Binance comes to an affirmative answer, the preparation for the process begins.

We believe that a possible listing of Binance on the stock exchange will indeed benefit the entire digital asset industry. The more companies from the digital asset sector go to IPO, the more transparent it will become. This, in turn, will ease regulatory pressure and allow the niche to become more global.

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