2023-7-14 17:05 |
As Binance turns 6, it’s an opportunity to look back, share some memories, and look forward.
What was once just an idea has grown into a worldwide platform that gives more than 140 million individuals access to finance globally, with perhaps billions more to follow.
How Binance startedBinance was started six years ago after raising $15 million USD in cryptocurrencies. It launched as a pure crypto-to-crypto exchange offering only five cryptocurrencies in two languages.
Interestingly, the exchange had to borrow a customer service team from Changpeng Zhao’s Friend’s business since it lacked a marketing staff. The customer service team has, however, grown to include hundreds of employees handling over 40 languages.
Binance has a significant test of what it stood for two months after it was launched when China enacted a ban on ICOs and cryptocurrency exchanges on September 4, 2017. The ICO projects were required to reimburse their backers for their investments.
The ban caused a decline in the value of many ICO tokens. A handful of the companies that were listed on Binance fell below their ICO prices, and the project teams lacked the resources to return investors’ money in full. After performing some calculations, the team and Changpeng Zhao agreed to compensate users with the company’s own money. Overall, $6 million was spent, which at the time was a sizable amount.
At the time, the $6 million represented more than 40% of Binance’s treasury and represented the single-largest percent-based expenditure in Binance’s history. As a two-month-old start-up, Binance was still not profitable and was spending money on hiring staff, purchasing servers, and other things.
Binance actions after the China ban received an overwhelmingly positive response from the global crypto community, resulting in too many users across the globe flocking to the Binance exchange. A month later, the exchange reached 120k users and began to make profit.
Binance’s run-ins with regulators around the worldBinance launched Binance.US in 2019 with the express purpose of providing fully regulated service to the US market. Binance.US currently holds 43 state MTLs (Money Transmitter Licences).
Binance has demonstrated that compliance and innovation can coexist on a global scale. The exchange has received licences in 17 different countries, which attest to our pro-regulation stance and the significant investments we have made in the compliance and regulatory fields.
Lately, the exchange has come under fierce attack by the US Securities and Exchange Commission (SEC) which has filed a lawsuit against Binance, its CEO Changpeng Zhao, and its US subsidiary. The SEC went ahead to file requesting freezing Binance.US assets but later reached an agreement with the exchange.
While Binance has maintained its stand that it has complied with all the US regulations, it has withdrawn license applications in several countries, including the United Kingdom, the Netherlands, and Austria. However, the recent Ripple Labs win against the SEC and the ruling that the XRP token is not a token, is a major boost for Binance in its court case with the SEC.
Binance survived the LUNA and FTX crashesIt’s interesting to note that Binance was barely affected by the majority of the “catastrophic” occurrences in 2022.
Binance made an investment in the Terra project in 2018 saw Binance although the investment was never actively handled. The exchange decided to stay put when the Terra Luna debacle unfolded following the de-pegging of its TerraUSD (UST) stablecoin. As a result, its initial investment of $3 million in 2018 which had grown to $1.6 billion in 2021 fell to almost nothing in 2022.
Binance has still not moved the LUNA (now LUNC) tokens from the address where they were first sent.
Binance had also invested in FTX although they pulled out before the FTX crypto exchange crashed. Binance attempted to assist when FTX crashed and signed a LOI to conduct a thorough due diligence, but quickly realized it couldn’t participate in the transaction.
While Binance had some investment in Terra Luna and FTX, which have since collapsed, it did not have exposure or involvement with 3AC (Three Arrows), Genesis and Celsius all of which have also collapsed.
In the case of Voyager Digital, Binance.US tried to help out by putting in a $10 million deposit payment, before being forced to withdraw from the bidding process, after which it did has never have the $10 million back.
ConclusionCelebrating the sixth anniversary, Binance CEO Changpeng Zhao in a press statement sent to news outlets has stated:
“Every success, every milestone that we celebrate today is a testament to your commitment and dedication. Binance is not just our company, it’s a vibrant, resilient community that believes in our mission – the freedom of money.”
Despite the current regulatory challenges, Binance continues to be a main player in the crypto industry.
The post Binance celebrates its sixth anniversary: a reflection of few key moments appeared first on Invezz.
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