Binance, one of the world’s largest cryptocurrency exchanges, has been on a high-speed lane in terms of development and expansion, with no signs of return anytime soon. One of the biggest moves made by the exchange last year was its announcement that it would be withdrawing its services from the United States, only to set up a separate arm in the country called Binance U.S, an exchange that drives to be regulated, in partnership with BAM Trading Services.
Catherine Coley, CEO of Binance U.S, recently spoke about the United States-based entity and how it is different from the globally-renowned exchange, in an interview for Unchained Podcast. She stated that Binance U.S enables users a fast and convenient method to onboard fiat – U.S dollar – into the cryptocurrency markets, with a “large variety of selection across the tokens.” Coley also claimed that this exchange “really catered for the U.S user,” adding that it allowed users to comply with the necessary regulations placed in the country.
“[…] that really
Subsequently, Coley spoke about the reason Binance had to create a separate entity for the U.S-based user base. The CEO stated that one of the main reasons for this move was that the “U.S market is so unlike other markets that they [Binance] were already in,” adding that “blanket marketing” wouldn’t quite work out. She went on to state that there were different aspects that had to be taken into account, aspects such as local regulations, consumer types, etc. before such a move was made.
“[…] getting local currency access into these global crypto markets has really been an important factor for Binance to kind of progress in this space and so for us in the United States this was the opportunity to bring US dollars and fiat on-ramps into a regulated entity that would be up to par for the everyday American user”
Binance CEO says Peter Schiff is helping in promoting bitcoin
The CEO of Binance, Changpeng Zhao, tweeted that he thinks Peter Schiff is doing a great job to promote bitcoin. Peter Schiff had revealed that he lost access to his bitcoin wallet after confusing his PIN for the password.
Peter Schiff is a well-known critic of cryptocurrencies, particularly of bitcoin. Earlier last week, he tweeted that he lost access to bitcoins that were gifted to him by someone after his wallet stopped recognizing his password. He took the opportunity to thrash bitcoin once again.
“We need more of these types of negative voices.”
The CEO of Binance, Changpeng Zhao, tweeted, “I think Peter is doing great to promote bitcoin. He probably does not realize that given his illogical reasoning, most people will do exactly opposite of what he says.” He added that we need more of these typed of “negative” voices. Gold advocate Peter Schiff had twitted criticizing bitcoiners saying, “Bitcoin bugs still don’t know the difference between Bitcoin and gold.”
“Maybe he is Satoshi.”
Binance CEO Changpeng Zhao jokingly replied to one of the comments on tweets saying, “maybe he is Satoshi.” Peter Schiff has been able to get attention from the crypto community with his negative remarks about the crypto community. Earlier, Ethereum founder Vitalik Buterin tweeted in support of Peter saying that we can and should create better wallet tech to make security better.
Tenth Quarterly Burn Decouples BNB from Binance Profit
Binance’s tenth quarterly BNB burn had analysts discussing the exchange’s continued rise in implied profits despite a supposedly slower quarter.
Binance BNB Burn #10 and Presumptive Profit
The quarterly BNB burn has become something of a market indicator for the health of the broader crypto industry.
Binance’s tenth burn of over 2.2 million BNB tokens removed almost $40 million worth of BNB from the market. The burn represented “activity across Binance spot, margin, and futures exchanges, as well as the various solutions, divisions, and partners that use BNB” for Q4 2019.
With its longstanding policy of destroying 20 percent of its profits to generate value for its users by shrinking the supply of BNB, the profits of the infamously secretive exchange have always been reverse-estimated from the burn.
If it burned almost $40 million worth of BNB, for example, then that represents 20 percent of its presumptive profit of around $200 million.
The tenth burn meant four consecutive quarters of profit growth and was Binance’s 3rd largest ever in BNB terms and the 2nd largest in U.S. dollar terms. During a sluggish Q4, it was quite a feat.
Digital asset investment management company Arca calculated Binance’s profits as returning to circa 2017 levels at $188 million:
The investment firm arrived at an implied earnings estimate from the profit figures based on Binance’s volumes and fees:
In the exchange’s burn announcement, CZ asserted that:
“Binance Futures now regularly surpasses the Binance Spot exchange in terms of daily trading volumes, even when we only offered Bitcoin perpetual contracts. I’d say that Futures is the biggest catalyst for our coin burn figures this quarter and in the succeeding quarters to come.”
That was called into question by Arca’s Research Analyst Alex Woodward, who felt that it didn’t tell the full story. Assessing Binance’s revenues has become an imprecise art since it introduced futures and margin trading.
Volumes were far lower in the spot market than they were in 2017 when Binance was last earning the same kinds of revenue figures.
Analytics firm Messari originally came to similar conclusions about Binance’s implied profits, adding that “growth in burned tokens was fueled by the launch of Binance Futures last year which now regularly exceeds spot volume.”
Messari’s Ryan Selkis quickly identified his mistake and the post has since been updated.
Why Was the Whitepaper Changed?
While CZ has been silent on the issue, the amendment made to Binance’s BNB whitepaper was no doubt in anticipation of its U.S. ambitions.
If the price of BNB can be connected to Binance’s profits or revenues directly, or if analysts have cause to assess the price of BNB based on Binance’s presumptive profits, the token starts to look like a security.
Binance addressed that potential problem in advance and failed to notify the analysts, because it has no obligation to do so and because signaling the change could be easily misconstrued.
Instead, Binance is likely more concerned with Chainalysis’ recent accusations that the company platformed the exchange of over 25% of all illicit crypto in 2019.
SEC Position Leaves Public in The Dark
Binance’s whitepaper change burned analysts standing around the BNB fire.
But there remain longer-term transparency concerns, largely caused by the SEC’s “regulation-by-enforcement-action” approach to the industry. Until the sector enjoys the regulatory clarity it sorely deserves, Binance can burn as many or as few BNB tokens as it wants and refuse to connect the amount to any meaningful metric.
By distancing the performance of BNB from Binance’s profitability, the exchange has taken an important step toward ensuring it is in compliance with U.S. regulations.
As Cermak tweeted:
“CZ told me back then: ‘We also removed the profit language because some regions tend to associate profits with securities, and we would like to distance BNB from that. So going forward, we plan to describe the burn this way, and burn what we burn.’”
The amount of BNB burned may have some relationship with Binance’s profits, revenues, or trading volume in the future. Those connections will be made regardless, as analysts work to make sense of the numbers.
But the tenth burn, which, in CZ’s words, represented the exchange’s “activity” for the quarter, is a sign of ambiguity to come.
Public access to Binance’s data will likely be the biggest casualty in the grey regulatory environment in which crypto currently operates.
Binance’s P2P merchant program goes live
- Binance cites the increasing demand for global users and a need for higher liquidity as reasons for the launch.
- Merchants on the Android and IOS-enabled platforms earn money when they post fiat currency trading ads.
In a recent press release, crypto exchange Binance announced the launch of its Peer-to-Peer (P2P) Merchant Program, a user-oriented fiat currency trading platform. It stated the reasons for the creation of this platform to be increasing demand for global users and a need for higher liquidity.
Binance CEO Changpeng Zhao said:
In the past quarter, there has been increasing growth in trading volumes on Binance P2P platform, and we have constantly received requests for more fiat-to-crypto access from our global community. To meet the growing usersdemand, we are seeking credible merchants for Binance P2P trading platform globally.
Binance has witnessed more than 30% growth in trading volume over the past month, according to Coin360. With over 18 million users, the exchange boasts the largest average monthly traffic. When retailers and merchants on the IOS and Android-enabled platform post fiat currency trading advertisements, they earn money. Binance provides users with support and doesn’t charge transaction fees.
While Binance.US released its app earlier this month, Binance launched its P2P trading platform in October 2019. At the time, merchants could only join through invitation and referral. Now, however, the merchant program is available through open enrollment. Reportedly, the user experience quality is controlled through an “elimination mechanism.” Binance says that promotional activities will be available to the users in the future.