Binance Is Planning A Massive Acquisition Spree As Authorities Scrutinize Its Cryptocurrency Trading Arm

Binance plots M&A spree as regulators scrutinise crypto trading unit

Binance is considering an acquisition spree to expand into new regions, as its vast digital assets trading operation comes under more scrutiny from regulatory authorities.

Following its investment in the US business publication Forbes earlier this year, Binance, a cryptocurrency company that is one of the largest in the digital asset industry, is looking to acquire businesses that operate in traditional markets, according to the company’s chief executive, Changpeng Zhao, in an interview. We want to identify and invest in one or two targets in every economic sector to try to bring them into cryptocurrency,” Zhao explained, adding that encouraging a single company in an industry, such as the media, to embrace cryptocurrency will increase competition and put pressure on other incumbent groups to do the same thing. A flurry of regulatory rebukes has been leveled at Binance’s primary exchange business, enabling traders to make supercharged bets on digital assets. Binance’s dealmaking effort comes when its core exchange operation has been the target of regulatory rebukes. According to Zhao, the trading fees charged by Binance, which vary in tandem with the price of bitcoin and other cryptocurrencies, account for around 90 percent of the company’s total earnings.

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The Cayman Islands-based corporation is a significant player in the cryptocurrency trading market. According to the most current CryptoCompare data, Binance handled slightly more than $500 billion in spot cryptocurrency trading volume in January, roughly four times the amount taken by its nearest competitor. Its notional crypto derivatives volume of $1.5 trillion was more than double the next closest rival. Last year, regulators from throughout the globe sent warnings to customers who transacted on Binance’s huge cryptocurrency market about the dangers they were taking. They also expressed concern about the group’s anti-money laundering measures, which they believe are inadequate.

Zhao said that the firm was recruiting a large number of compliance and enforcement personnel and that it was using the same sorts of customer-checking tools that banks use to ensure compliance. He went on to say that the exchange currently has 70 staff in the United Kingdom, with the majority of them working on regulatory concerns. Binance, on the other hand, has had several run-ins with the Financial Conduct Authority, which is a British regulator. Following a deal Binance signed with payments provider Paysafe to recover access to a significant UK payments network after the exchange was kicked out from the system last summer, the Financial Conduct Authority (FCA) expressed “alarm” about the agreement in mid-February.

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This week, it also issued a new note of concern over Binance’s “complex and high-risk financial products” after the exchange’s agreement with Eqonex, a failing Singaporean digital finance business, which the company claimed may be a step toward acquiring complete control of the company. Equinox is the parent business of digital assets custody firm Digivault, a slew of cryptocurrency organizations registered with the Financial Conduct Authority (FCA).

With the help of a London-based affiliate, Binance had attempted to gain entry onto the Financial Conduct Authority’s list of approved digital asset companies. Still, it withdrew its application last year after the FCA demanded “exhaustive disclosure” and hundreds of pages of documents relating to anti-money laundering controls. The Financial Conduct Authority (FCA) subsequently said that Binance’s UK subsidiary had failed to answer some of its basic inquiries. Binance’s corporate interests might be broadened due to the dealmaking campaign. As part of this approach, Binance made a $200 million investment in Forbes, which resulted in the group receiving two board seats on the century-old American business publication. Zhao said that the organization will now focus on other areas, including retail, eCommerce, and gaming.

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Zhao has said that he does not want to transform Binance into a “conglomerate.” As an alternative, he envisions the firm developing the infrastructure necessary to incorporate digital assets into established sectors.
According to Zhao, increasing the size of the cryptocurrency business is the goal.


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