By
Godfrey Benjamin
May 10th, 2024
Although Zhao says that Binance.US should float an IPO soon, he added that the move depends on a few factors, including regulatory approval.
Binance.US plans to have an IPO within the next three years, according to report by The Information. The founder and CEO of Binance, Changpeng Zhao, suggests that the exchange is looking to follow Coinbase’s model. In Zhao’s own words, “Binance.US is just going to do what Coinbase did.” However, the company CEO quickly pointed out that the three-year target for IPO depends on business growth.
“So, if the business is going to grow steadily over the next three years, this should be enough time before the IPO,” he said, before adding, “if there is a prolonged bear market for three or five years, it may take a little longer.”
Coinbase was listed on Nasdaq earlier this year, as the US now has an ecosystem where crypto companies can go public. Several other US-based crypto platforms are also looking to list publicly in the near future. They include Gemini, Kraken, and Circle.
Zhao first hinted at Binance.US looking towards an IPO during his speech at the Redefine Tomorrow event in July. He further stated back then that the timing is highly dependent on several factors, including regulatory approval.
In addition, Zhao says there are plans for him to cede significant control of the Binance.US board. Binance.US intends to achieve this through a large private fundraising round within the next two months.
Changpeng Zhao revealed that Binance made between $800 million and $1 billion in profit last year. Earlier this year, he said the main division of Binance was not planning an IPO. He suggested this was so because the company had impressive overall growth and cash reserves.
Planned Binance.US IPO Comes amid Growing Scrutiny of Crypto Space
However, in recent times, Binance has come under increased scrutiny from regulators across the globe. Several countries, including the UK, US, and Eastern nations, advocate increased government oversight over crypto exchange activities. This is due to rising concerns over the use of crypto for financial malpractice, including money laundering.
As a result of this, Binance is currently working to reshape its image and appear more compliant-friendly. Last month, the exchange announced intentions to start demanding stricter background checks on its customers. In addition, the exchange scaled back its product offerings in several countries in Europe, and most recently, East Asia. This includes derivatives trading – leveraged trading and tokens linked to equities.
Also last month, Brian Brooks resigned from Binance.US after only three months on the job. Brooks was the chief executive of Binance US, and cited “differences over the strategic direction” as the reason for his exit. After his departure, the company selected Joshua Sroge as the interim CEO of Binance US. Sroge previously served as a chief financial officer (CFO) of the firm and is one of its longest-tenured employees.
Binance is also looking for a new CEO to replace Changpeng Zhao. Zhao himself is welcoming this and said the company is favoring a candidate with a “very strong regulatory background.”