Binance Founder Changpeng Zhao Claims His US Encryption Exchange Arm Targets IPO Within 3 Years: Report

Changpeng Zhao, founder and CEO of Binance, the global cryptocurrency exchange, said his US arm could have an initial public offering within the next three years, The Information reported on Wednesday.

“Binance.US will just do what Coinbase did,” Zhao said, according to the report.

Binance.US is also expected to end a large round of private fundraising in the next two months, which should reduce its grip on the board, Zhao said in a Zoom interview with The Information.

Binance generated $800 million (about Rs. 5,840 crores) to $1 billion (about Rs. 7,300 crores) in profit last year, according to Zhao, the report added.

Last month, Brian Brooks, chief executive of the US arm of the cryptocurrency exchange, resigned just three months after taking office.

The exchange is under pressure from regulators around the world over concerns about the use of encryption in money laundering and risks to consumers.

Binance said last month it would require stricter background checks on clients to bolster anti-money laundering efforts, effective immediately.

The exchange, whose holding company is registered in the Cayman Islands, has scaled back its product offerings, including leveraged trades and equity-linked tokens, and said it wants to improve relations with regulators.

The potential of cryptocurrency exchanges for money laundering has long worried regulators, with US Treasury Secretary Janet Yellen and European Central Bank President Christine Lagarde among those who have expressed concerns this year.

The Dutch central bank said on Monday that Binance was not complying with its anti-money laundering and terrorist financing laws.

Binance said on its website that users would have to complete a verification process to access its products and services. Those who have not done so will only be able to withdraw funds, cancel orders and close positions.

Until now, document-based ID checks at Binance were only necessary for users who wanted higher trading limits. Users will now have to carry an identity card, driver’s license or passport to prove their identity, Binance said.

© Thomson Reuters 2021


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