Binance remains the same as always, and its position as the "number one exchange" has not been shaken.
Written by: Gou, Foresight News
Unlike the FTX crash, it has been two weeks since Zhao Changpeng left Binance, but it seems that apart from the initial one or two days of discussion, there has been no major uproar. After Zhao Changpeng resigned as CEO and Richard Teng took over, Binance is still running forward as usual, no different from the past.
There was no misappropriation of user funds, no market manipulation, but after months of bargaining, Binance finally chose to plead guilty and accept punishment. You can say that this is a helpless sacrifice in the struggle between Crypto and regulation, or that this is the price paid for the wild growth in the early days, but to quote Zhao Changpeng himself, all of this is "the best arrangement."
The new CEO focuses on stability
"Bringing value to customers" and "financial freedom" are the two key words emphasized by the new CEO Richard Teng in his first open letter, coupled with the "big words" of "we are stronger than ever before". Compared to the relaxed atmosphere in Zhao Changpeng's past blogs, Richard Teng's first impression is low-key and restrained.
Richard Teng, new Binance CEO
The rumor that Richard Teng will take over as CEO of Binance first came from a report by Bloomberg on June 5 this year. The report quoted people familiar with the matter as saying that if Zhao Changpeng resigns due to regulatory difficulties, Richard Teng will become the next Binance CEO. Although Binance staff immediately clarified to Foresight News that "the news was speculation by a certain media", it now seems that this is not groundless.
This "unexpected but reasonable" CEO successor, 52, has held important positions in the Monetary Authority of Singapore, the Singapore Stock Exchange and the Abu Dhabi International Free Zone.
Richard Teng joined Binance in May 2021 as CEO of Binance Singapore. He was then promoted to Head of Middle East and North Africa at Binance in December 2021, and a year later was appointed to oversee European affairs (Head of Europe, Middle East and North Africa). In April this year, he was again appointed to oversee Asian affairs (Head of Asia, Europe, Middle East and North Africa). Just one month later, Richard Teng was responsible for everything except Binance.US.
Although we have not yet seen Richard’s actual “performance”, judging from the fact that he quickly stabilized the morale and market confidence, and clearly planned the future development direction of Binance, Zhao Changpeng did not make a mistake.
As early as the middle of this year, Richard praised Binance's performance in compliance in recent years in an interview and said that compliance will remain a top priority in the future.
Richard's resume reflects his rich experience in finance and compliance. Previously, Binance paid a price for compliance issues, but in the future, under the leadership of a CEO with rich experience in finance and compliance, Binance can move forward with ease. Being punished may be the end of "Binance 1.0", but it will tear down a shaky wall for "Binance 2.0". Beyond the ruins is the highway to where the sun rises.
The final "stress test"
In addition to the new CEO's calmness in the face of danger, many people seem to have seen one thing through this incident: Binance has grown into a mature enterprise that does not rely on an individual.
Like many Internet companies with market capitalizations of tens or hundreds of billions, the founder has become a symbol. Even if he does not participate in the details of daily management, the company will move forward in an orderly manner along the established route. The same is true for Binance today. Unlike many small-scale Web3 projects that have been devastated by the departure of their founders, Binance is like Bitcoin after the disappearance of Satoshi Nakamoto. It has not only not declined, but has become more resilient.
On the one hand, in terms of market share, although Binance has been affected by events in the past two years, including the FTX collapse, the U.S. Securities and Exchange Commission (SEC) prosecution, the U.S. Commodity Futures Trading Commission (CFTC) prosecution, and the U.S. Department of Justice investigation, its current trading share and market share of reserve asset value remain around 50%, and its status as the "number one exchange" has not been shaken.
Market share of exchanges that do not support USD trading by volume, The Block
The proportion of exchange reserve assets, from the Twitter of X user Jinze Jinze
According to DefiLlama data, due to negative news on November 22, Binance outflowed more than US$3 billion in funds, and its reserve assets fell from nearly US$70 billion to approximately US$66.6 billion. This number has now risen to US$68.6 billion. Nearby, excluding the factor of token price increases, new inflows and returning funds have offset at least half of the impact. Nansen data also shows that a week after Binance experienced a wave of currency withdrawals due to Changpeng Zhao’s resignation and sky-high fines, capital outflows stopped, and there was even a net inflow of nearly $90 million on the Ethereum chain.
Compared to the FUD that arose in the market when FTX collapsed and was sued by multiple US regulators, this time the market almost stood on the side of Binance. Although many people still withdrew their funds "routinely" for safety reasons, we know that this time they will come back.
In addition, perhaps because Binance has been negotiating and preparing for the settlement conditions for a long time, or perhaps because the entire Web3 community has become more resilient after the baptism of 2022, we have hardly seen any major negative impact from this incident. To some extent, Binance has been generally recognized by the market, and the suppression of third parties can no longer easily destroy the market's trust and confidence in it.
Next stop, Binance 2.0
“Binance’s settlement with the U.S. government is positive for the crypto industry as well as exchanges, which means that potential systemic risks from exchange trading will be significantly reduced,” JPMorgan Chase said in a report. From another perspective, the punishment imposed by the Department of Justice can be regarded as a warning to the world: as long as it operates in compliance with regulations, cryptocurrency exchanges can operate in the United States.
At the beginning of last month, Binance announced the launch of Binance Web3 Wallet, officially entering the Web3 wallet field. Looking back over the years, Binance's business has expanded to various fields of the Web3 industry: exchanges, cloud services, PoW mining pools, staking services, finance, payments, and investment and incubation centered on Binance Labs, popular science, market research, education centered on Binance Research Institute, etc. If BNB Chain is included, Binance has covered almost every corner.
When Cook took over Steve Jobs' position to lead Apple, many people thought that without "Boss Steve Jobs", Apple had lost its soul. But the fact is that Apple is still leading the industry's innovation. Although the iPhone was amazing when it first appeared, it has never been surpassed, but Apple has not fallen from the altar. Instead, it continues to advance triumphantly, and its stock price has soared all the way, from one trillion to two trillion and then to three trillion, creating one miracle after another.
Analogous to Binance, such a complex business would be difficult to run by one person alone without a mature management and innovation system. Therefore, whether Zhao Changpeng leaves or not, it is believed that it will not have much impact on Binance's existing and new business development.
Binance's resilience in the face of setbacks has given the industry a powerful boost, and has also made everyone understand that regulation is not "unreasonable" and that the market will still open its doors as long as the appropriate requirements are met. Now, under the leadership of Richard Teng, Binance 2.0 has officially kicked off. I believe that the new CEO will lead Binance to continue to work hard in the direction of compliance, and on this premise, continue to contribute to the development of the industry and financial freedom.
