Who can stop CZ? Binance invests in traditional finance
After a tumultuous 2021, Binance asserts its position as a leader in crypto and the global economy.
In five years, Binance has become an essential platform in the cryptocurrency market and its director Chang Peng Zhao calls CZ one of the richest people in the world. However, Changpeng Zhao does not want to stop there. After renaming Binance Smart Chain to BNB Chain, the exchange will also invest in other economic sectors. In order for the cryptocurrency market to grow, it must increasingly tie in with traditional finance. After its setbacks with regulators, Binance is once again becoming a major player in this sector.
- Binance facing regulators
- Investing in Forbes, a first turning point
- Implementing cryptocurrencies in the business world
Binance Facing Regulators
Despite its central place in the cryptocurrency sector, we can say that the year 2021 has been eventful for Binance. While recording a record number of transactions and a bullish rally in BNB, the company had to contend with regulators. What is mainly reproached to this company is to have no geographical existence. Without a head office, the cryptocurrency platform thus escaped a number of tax regulations. So much so that England was quick to ban certain Binance activities to its nationals.
Without going as far as a ban, France, Germany and Italy warn Binance of its non-compliance with regulations. This had no influence on its use. Shortly after these warnings, European states raised their voices. Binance no longer had the right to use the SEPA transfer system. In addition, after trying to tokenize certain shares on its platform, the company had to back down because of stock market regulators. Since then, she has kept a low profile and tries to reassure the States.
Initially, the firm hired Brian Brooks, acting head of the Office of the Comptroller of the Currency in the Trump administration, as executive director of Binance US. Changpeng Zhao has also promised to give a headquarters to his firm. This headquarters will apparently be in Ireland. So far, these first steps have reassured regulators. Indeed, for a few weeks European users have been able to use SEPA transfers again
Cryptocurrency Leader Joins Forbes
Binance very quickly thought of diversifying its activities. After developing his platform and then his blockchains (the Binance-Chain then the Binance Smart Chain which became the BNB Chain), other projects interested him. Among its investments in the cryptocurrency market, Binance has positioned itself on the Oasis blockchain to the tune of 40 million. This capital will contribute to the development of its ecosystem. But this investment was followed by Binance’s first entry into the capital of a traditional finance player: Forbes. The investment is 200 million. He must help Forbes transform into a publicly traded entity. This will be done through a SPAC (Special Purpose Acquisition Company).
After the finalization of the agreement in the first half of 2022, Forbes may be listed on the New York Stock Exchange under the name FRBS. The agreement makes Binance the second investor of Forbes which thus gains two director positions on the board of directors. It is therefore more than a simple investment but a true partnership. The trading platform thus demonstrates its credibility in the business world. This first investment is the prelude to a series of investments in traditional finance. It remains to be seen when Chang Peng Zhao will want to stop.
From Binance Trading Platform To Real Economy Investment Fund
Binance’s purpose is clear. Its investment policy must make the cryptocurrency sectoressential in all economic sectors. In an interview with the Financial Times, CZ thus claimed: “We want to identify and invest in one or two targets in each economic sector and try to integrate them into crypto”. With this strategy, Binance wants to be part of the game of competition in each sector so that competitors in turn integrate digital assets. However Binance has also indicated that it does not want to become an investment fund or a business conglomerate. These positionings must serve above all to establish the cryptographic sector by providing the necessary infrastructure. After gaming, the real economy should increasingly use the world of blockchains. There is no doubt that behind this altruistic discourse, cryptocurrencies.
After a few months of turmoil with regulators, Binance has once again become a reputable company in the cryptocurrency world. It was enough for ChangPeng Zhao to continue the expansion of his firm. It was indeed time to get out of the comfort zone of the trading platform. After joining the Forbes board of directors to contribute to its listing on the New York Stock Exchange, Binance wants to open up more and more to traditional finance. With its strategy of investments in all economic sectors, CZ wants to make Binance a pathfinder. Thanks to it, cryptocurrencies will be able to infiltrate the entire economy.