Factbox: Binance, the world’s top crypto exchange, at the center of US investigations

by Arthur · March 27, 2023

LONDON, March 27 (Reuters) – The world’s largest cryptocurrency exchange Binance and its CEO Changpeng Zhao have been sued by the US Commodity Futures Trading Commission (CFTC) over regulatory violations, according to a court filing on Monday.

Here are some important facts about Binance:

Table of Contents

THE COMPANY

Binance was founded in Shanghai in 2017, but later moved to Tokyo and then Malta. While the holding company is based in the Cayman Islands, Binance says it does not have a headquarters and has declined to disclose the location of its main exchange Binance.com.

The exchange offers spot and derivatives trading and a range of services from non-fungible tokens (NFTs) to cryptoloans and asset management.

It has around 128 million users, according to a 2022 review posted on the website, with over 7,500 employees worldwide. The company also has a formidable presence on social media, with over 10 million Twitter followers.

ECONOMY

Binance’s global trading platform, Binance.com, is by far the world’s largest cryptocurrency exchange. Last year, it processed about $65 billion worth of crypto trades a day, Binance said, dominating the crypto trading landscape with more than half the market, CryptoCompare data shows.

Nevertheless, the economy is opaque. As a privately held company, it does not disclose basic financial information such as revenues, profits and cash reserves. Binance also hasn’t raised outside capital since 2018, industry data shows, meaning it hasn’t had to share financial information with outside investors since then.

A Reuters analysis of Binance’s corporate filings last year found that the core of the business — the Binance.com exchange — remains largely hidden from public view.

MANAGEMENT

Binance was founded by CEO Changpeng Zhao, a Canadian citizen born and raised until the age of 12 in China, and Yi He, a former host of a Chinese TV travel show. The couple were in a romantic relationship and have a son together who was born in the United States, Reuters reported in October.

Yi He is now one of Zhao’s most powerful deputies, running the company’s $7.5 billion venture capital arm, as well as holding other key roles, including chief marketing officer.

Zhao assigned top jobs to an inner circle of associates, many of whom had worked or studied in China, according to the Reuters report in October. The company has hired a lot from the traditional financial and regulatory worlds in recent years. In February, Noah Perlman, a Morgan Stanley veteran, said he had become Binance’s chief compliance officer.

INVESTMENTS

Since 2018, Binance’s venture capital arm has invested in over 200 venture investments, the company says. PitchBook data shows they have spent nearly $2 billion on over 150 deals, including major data site CoinMarketCap.

Last year, Binance expanded its reach beyond the crypto sector in 2022, investing $500 million in Tesla CEO Elon Musk’s takeover of Twitter.

The company is also prominent in the world of sports, sponsoring the Italian football team Lazio and the Argentine national team. It also sponsored the African Cup of Nations tournament in 2021. In 2022, Binance signed a partnership to promote its NFTs with Portuguese soccer star Cristiano Ronaldo.

Reporting by Tom Wilson Editing by Marguerita Choy

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