The regulatory clampdown on cryptocurrency exchanges in China has been noted as a key factor in the sensational growth of Binance in 2018.
Launched in the middle of 2017, the rate of growth that Binance has experienced, both in terms of trading volume and capitalization has attracted a lot of attention within the cryptocurrency environment. In just a few months, the exchange grew from just a newcomer to one of the leading crypto exchanges in the world.
Even though the company started in 2017, its founder & CEO Changpeng Zhao has always been a major player within the crypto ecosystem and other related industries. Zhao founded Fusion Systems in 2005 in Shanghai, a company that specialized in building high-frequency systems for brokers. Down the road in 2013, he became the third member of the Blockchain.info cryptocurrency wallet team. Zhao also had a brief stint at OKCoin, where he worked as a CTO.
Despite his experience and expertise, Zhao notes that the force behind Binance comes from innovation that was born out of a supposedly adverse circumstance, speaking to the South China Morning Post. The ban in China motivated Zhao and the entire Binance team to expand everywhere else, hence the subsequent growth that has established the company as a leader in the industry.
In September 2017, China shut down the activities of all domestic crypto exchanges. This move forced Binance to move its headquarters and servers to Tokyo. This kept the establishment outside the regions where the Chinese regulations could affect its activities.
Binance then embarked on its systematic expansion exercise, which saw the company encroach into other markets, including Singapore and Taiwan.
Zhao elaborates that while Chinese operators of cryptocurrency exchanges scrambled to keep up with new regulations on the mainland, Binance found the perfect opportunity to capture new regions and establish itself. This is a move that has proven to be rewarding, based on visible evidence.
Binance claims to have over 10 million users across the globe who engage in trading digital tokens. From transaction fees alone, the company claims to have generated a profit of $350 million between January and June 2018.
The expansion philosophy of Binance necessitates the nomadic lifestyle of Zhao, who is known by his constant travels across different parts of the world. During the past month alone, Zhao said he has visited eight countries which includes Switzerland and South Korea to hire new staff, attend industry events and forge deals. He has not traveled back to mainland China since the cryptocurrency crackdown a year ago, he said.
Featured image from Shutterstock.
Last modified: May 20, 2020 5:10 PM UTC