- The founder of Binance has dropped a massive hint that the US arm of the exchange may go public in the future
- The world’s biggest exchange is currently taking steps to set up corporate structures “to make it easier for an IPO to happen.”
- Binance has suffered a series of grim misfortunes after facing regulatory crackdowns from British and Japanese authorities.
- Binance’s competitor Coinbase carried out its IPO in April successfully, with shares opening at $381.
After Coinbase went public, the cryptocurrency community kept a close watch on Binance.US to determine whether or not they will follow the same path. After months of keeping users in the dark, Binance’s CEO, Changpeng Zhao announced that the company is “looking at the IPO route” but there are no immediate plans for action.
Binance has been through the eye of the storm in recent months with increasing regulatory pressure around the world, yet the exchange remains unfazed and believes that it will come through with its head held high.
Possibility of an IPO Hovers around Binance
Binance CEO, Changpeng Zhao has dropped hints of an Initial Public Offer for Binance.US in the future. He dropped the bombshell in a conversation at the Global DeFi Virtual Summit hosted by SCB 10X.
The conversation was moderated by Mukaya Panich, the Chief Venture and Investment Officer at SCB 10X who posed a variety of questions to Binance’s CEO.
When posed the question about Binance’s intentions for the future, Changpeng Zhao stated that Binance US is “looking at the IPO route.”
He noted that for an IPO to be successful, there are certain prerequisites that regulators have to keep an eye on such as having a well-defined corporate structure. According to Zhao, Binance is setting up the structures to make the path for an IPO seamless.
However, he was quick to add that there is “no direct plan for IPO right now” and that the company is currently focused on growing.
What Does It All Mean?
In a bid to meet the regulatory requirements of US agencies, Binance created Binance.US and asked US users to register on the sister exchange. Since its launch, Binance.US has been made available in over 40 states in the US.
The intent to go public has some connotations. First of all, Binance has stated that it is fully compliant with regulatory requirements and collaborates with law enforcement agencies in flagging down illicit transactions.
Secondly, it shows that Binance will be following Coinbase’s path in going public. In April Coinbase went public with shares opening on NASDAQ at $381. Following the success of the historic move by Coinbase, Binance treds a previously tested path.
Going public will bolster the cash reserves of Binance and such a move will be a boost to the global cryptocurrency market capitalization. There is also the opportunity for investors to invest in cryptocurrencies without buying cryptocurrencies.
On The Flipside
- The move by Binance to go public may trigger a new wave of investigations from regulatory agencies in the US.
- Currently Binance has faced investigations by the IRS, CFTC, and the Department of Justice.
Binance’s Regulatory Battles
Binance has faced stiff opposition from regulatory agencies globally in recent times. Perhaps, most iconic is the move from the UK’s Financial Conduct Authority who stated that Binance “is not permitted to undertake any regulated activity in the UK.”
Similarly, Japan’s Financial Services Agency has issued a warning to Binance that it is not authorized to do business in Japan. Due to increasing regulatory pressure in Canada the exchange has rolled out plans to cease operations in Ontario by December 31.