In the coming year, Binance will focus on building practical tools, continuing to expand the team, and providing support for promising projects.
Ups and downs are probably the common mark that everyone has on 2022.
Externally, there is the war between Russia and Ukraine, the international situation is changing rapidly, and global central banks are raising interest rates to curb inflation; internally, the crypto market continues to decline, and crypto companies such as Celsius, Three Arrows Capital, and FTX have gone bankrupt one after another, which has triggered unfavorable social public opinion and more stringent regulations. Supervision.
Although the development of the crypto industry has suffered setbacks in the past year, Binance has stepped forward in the face of difficulties and helped the building to collapse.
On the one hand, Binance has established an industry recovery fund to support crypto companies on the verge of bankruptcy and continue to build Web3. On the other hand, it always adheres to the supremacy of user interests, proposes six key principles of the crypto-asset ecology, and promotes the development of centralized platform transparency through a series of actions to rebuild user confidence: proactively disclosing hot and cold wallet addresses, and introducing Merck-based Ershu's reserve certificate mechanism (this measure has become an industry example).
In addition, Binance has always adhered to the compliance line. By the end of 2022, Binance has obtained operating licenses and registration permits in 14 countries or regions on five continents, and its compliance team has expanded from 500 to 750 people.
“No matter what the story is in the coming 2023, we are ready. Binance has an excellent, diversified and mission-driven professional team, a management team composed of management experts, and sufficient capital reserves. ." Regarding the future, Changpeng Zhao (CZ), the ambitious founder and CEO of Binance, said that he will continue to work hard in the encryption industry.
1. Put users first and be transparent
In mid-November, when FTX Group, Alameda and its more than 130 affiliates filed for bankruptcy liquidation in the United States, a hurricane swept through the entire crypto market: institutions and users whose assets could not be withdrawn could only passively accept the reality, and many FTX-related crypto companies Companies and well-known projects have encountered liquidity crises and are on the verge of bankruptcy. Fear and despair permeate the entire Crypto world.
CZ knew that he had to take action to restore confidence in crypto finance, which was about to fall into an abyss. Public opinion at this time was not friendly to him, believing that he had destroyed FTX. Words such as "executioner" and "culprit" frequently appeared on his social media. In fact, when a bubble pops, people always blame the first person to pop the bubble, similar to other experiences throughout history. But CZ did not worry about this for a long time. Instead, he stood up at the first moment of the crisis.
On November 15, Binance released the "Six Commitments of a Secure Centralized Exchange". CZ proposed six key principles for the crypto-asset ecosystem and called on all centralized exchanges to follow them to rebuild user trust. “As a centralized trading platform, our first priority is to “protect users.” User funds must not be mismanaged and all measures must be taken to ensure the safety of user funds. "CZ said.
Specifically, the six principles include: (1) Risk avoidance measures must be adopted for user assets, and user funds must not be used for trading or investment; (2) Do not use the exchange’s own native tokens as collateral (FTX collateral FTT and SOL series account for more than 70% of the products); (3) Share real-time asset certificates; (4) Maintain strong safety reserves; (5) Avoid excessive leverage. It is unwise to raise debt in order to burn money for rapid growth. , calling on industry partners to adopt the same fiscally conservative attitude; (6) Continuously improve security protocols and develop strict KYC and AML (anti-money laundering) measures.
In order to promote the development of transparency in centralized platforms, Binance leads by example and implements the above requirements. Take "sharing real-time asset proof" as an example. Binance took the lead in proactively disclosing the platform's cold and hot wallet addresses for users to view. According to Nansen data, Binance initially announced that the total asset reserves of wallet addresses exceeded US$65 billion; even though the wave of user withdrawals in December did not have a serious impact on it, Binance still has US$55 billion in asset reserves. More importantly, more than half of Binance’s reserves are stablecoins, and the sum of BTC, ETH and various stablecoin assets accounts for nearly 80%. It is also one of the healthiest reserves among all mainstream CEXs.
In addition, Binance also promotes the introduction of a reserve proof mechanism based on Merkle trees. This measure has become an industry example, and OKX, Bitget and ByBit have basically adopted a similar approach. Compared with separate reserve announcements, reserve certificates take into account the exchange's liabilities (i.e., the amount of user deposits) and can truly demonstrate the exchange's solvency. For CEX, “proof of reserves” is also an important step to reassure people and allow users to better understand how the platform manages assets.
In the past few months, Binance has announced reserve certificates twice. All types of assets are 100% asset-backed, and Binance has promised to publish reserve certificates every month. More importantly, Binance has also been working hard to expand more currency verifications, from the first phase of BTC to now covering BTC, ETH, BNB, LTC, USDC, USDT, XRP, BUSD and LINK, a total of 9 assets, and Currently, other platforms only cover three assets: BTC, ETH, and USDT. From this point of view, Binance is undoubtedly better at transparency.
In addition, compared with some platforms that are unable to withstand extreme emergencies, Binance's ability to resist risks has been significantly strengthened, and the Investor Protection Fund (SAFU) is the source of its confidence. As early as 2018, Binance established SAFU to protect the interests of investors in response to losses of user assets caused by extreme conditions or security issues. As of November 2022, the total value of the SAFU Fund reaches $1 billion. "We promise to Binance users and the crypto-asset ecosystem community that the SAFU fund will always remain at a considerable scale. We will continue to fulfill this commitment and continue to build the industry. "
2. The road to compliance has a long way to go
With the series of black swan incidents such as Celsius, Three Arrows Capital, and FTX, users and regulators have lost confidence in the industry, and mainstream public opinion has also moved in a direction unfavorable to crypto finance, which has also triggered stricter supervision. U.S. Treasury Secretary Yellen called on the government to strengthen supervision of cryptocurrencies, saying that the FTX bankruptcy was an objective lesson that showed that the industry needs to strengthen supervision; after the FTX bankruptcy, the SEC also strengthened relevant warnings, stating that many cryptocurrencies can be defined as "Securities Assets".
It is conceivable that since then, the difficulty for encryption companies, especially encryption trading platforms, to obtain encryption licenses in countries around the world has increased exponentially.
For Binance, compliance has been in its blood since its birth. In the past few years, Binance has continued to implement compliance strategies and continued to obtain encryption licenses in many countries and regions around the world. In the past 2022, Binance’s core strategy is to promote compliance globally.
In the first half of last year alone, Binance obtained a Type IV license from Bahrain, a fully regulated virtual asset (VA) trading platform license from Dubai, in-principle approval from the Abu Dhabi Global Market, and approved registrations in France and Italy. license.
As of the end of 2022, Binance has obtained registration permits or licenses in 14 countries or regions on five continents, including Colombia, Abu Dhabi, Bahrain, Dubai, South Africa, France, Italy, Spain, Poland, Lithuania, and Cyprus. , Kazakhstan, Australia and New Zealand. In addition, Binance has made efforts to expand its compliance team to recruit professional talents, and the compliance team has also expanded from 500 people at the beginning of last year to 750 people.
In addition to applying for a license, Binance is also technically implementing advanced detection tools for access to certain regions. In 2022, Binance continues to improve its security system and introduces more and stronger identity verification protocols. Currently, Binance’s KYC requirements are extremely strict: only users with government-certified identities can trade crypto assets on its platform. This not only reduces the possibility of criminals using the platform to transfer illegal funds, but also enhances the security of all users.
To further strengthen the fight against cybercrime, ransomware and financial terrorism, Binance has increased its investment in security and compliance by more than 500%, and has become the first crypto-asset exchange to join the National Cyber Forensics and Training Alliance (NCFTA) platform. (Note: NCFTA is a non-profit organization focused on identifying, deterring and eradicating cybercrime.)
In 2022, Binance’s Security & Investigations team responded to 47,000 law enforcement requests and organized and participated in more than 70 anti-cybercrime workshops attended by global investigative agencies and cybercrime fighters.
“Regulatory compliance is important to Binance’s mission of democratizing crypto assets and protecting user security. By ensuring that we meet high regulatory standards, we can provide millions of users with access to compliant financial products and services and increase trust in the industry. and visibility.” CZ said in an open letter, “I can proudly say that Binance will be at the forefront of regulatory compliance in the past, present, and future.”
In the coming year, Binance will continue to collaborate with global regulators and policymakers to ensure compliance with all current requirements and promote the rationalization of crypto asset regulatory policies to protect users while creating an environment conducive to financial innovation.
3. Continue to build Web3
In the past few months, the impact of the bankruptcy of FTX and Alameda Research is gradually emerging, and multiple crypto projects have encountered liquidity crises and are on the verge of collapse. For example, Ren Protocol shut down its Ren 1.0 network in December due to lack of operating funds.
At a time when the industry is in crisis, Binance has stepped forward and launched the Industry Recovery Initiative (IRI) to help high-quality projects survive the liquidity crisis. Binance stated that IRI is not an investment fund. IRI will last for about 6 months and will be fully flexible in terms of investment structure (tokens, stocks, debt, convertible bonds and other instruments can be used), and solutions can be tailored as needed. plan.
In addition, Binance has pledged to provide $1 billion to IRI, which will increase to $2 billion in the future if necessary. IRI has also been recognized by top institutions in the crypto industry, and Jump Crypto, Polygon Ventures, Aptos Labs, Animoca Brands, GSR, Kronos, Brooker Group, TRON DAO, Huobi Global, and Poloniex have also committed to join the program and provide funding. To date, Binance has received 150 projects applying to IRI for funding.
In addition to helping struggling crypto companies, Binance has also vigorously supported and funded the development of many crypto start-up projects in the past few years, investing more than $500 million in Web3 and blockchain innovation projects through Binance Labs, covering GameFi, There are multiple subdivided tracks such as NFT and DEX, as well as various types of infrastructure.
“My goal remains to have everyone at Binance focus on what matters most: building and staying user-centric. I’m proud that we still adhere to these core values in everything we do. ." CZ said that Binance's mission is to continue to build Web3, promote the development of the industry, and build a communication bridge between the crypto asset world and traditional finance.
In addition to its deep participation in the Web3 field, Binance also invested in other traditional track projects in 2022, starting a crazy layout mode. For example, Binance invested US$500 million to help Musk acquire Twitter; Binance announced a strategic cooperation with Korean entertainment companies YG Entertainment and SM Brand Marketing. The two parties will cooperate in the metaverse, NFT, games and other fields, and establish environmental protection NFT ecosystem. In addition, Binance also sponsored multiple sports events in 2022 and cooperated with many celebrities to increase the publicity of crypto finance:
Binance officially announced that it has partnered with the Confederation of African Football (CAF) to become the official sponsor of the 2021 TotalEnergies Africa Cup of Nations (AFCON);
Binance has partnered with the Argentine Football Association (AFA), one of the largest football federations, to become its main sponsor and will subsequently cooperate to issue fan tokens;
Binance becomes the exclusive cryptocurrency sponsor of the Brazilian Football League Serie A;
Binance becomes the official crypto-asset trading platform partner of the 64th Annual Grammy Awards;
Binance teamed up with Cristiano Ronaldo (Cristiano Ronaldo) to provide exclusive NFT collections;
Binance joins hands with The Weeknd to create the world’s first Web3 tour event;
TikTok star Khaby Lame joins forces with Binance to raise awareness of cryptocurrency.
In addition to investment, Binance is also actively promoting Web3 education in mainstream society to help users acquire as much relevant knowledge as possible, ranging from basic security advice to advanced blockchain concepts and understanding of complex financial product mechanisms.
In 2022, a total of 26 million people began to learn about crypto assets through Binance Academy. The academy team also brought crypto assets and Web3 education to 73 universities (25 in North America, 23 in Europe, 20 in the Middle East and North Africa, Asia Pacific, and 5 Latin American universities), benefiting more than 5,500 students. In order to further spread the knowledge of crypto assets, Binance Academy has also begun to produce and publish structured online courses in 14 languages, and plans to launch a job search course for future Web3 professionals next year.
“We are proud to say that as one of the largest knowledge platforms in the crypto-asset industry, Binance Academy helps thousands of students gain basic knowledge of crypto-assets and blockchain for free every day,” said CZ.
Summarize
“No matter what the story is in the coming 2023, we are ready. Binance has an excellent, diversified and mission-driven professional team, a management team composed of management experts, and sufficient capital reserves. .” CZ revealed that in the coming year, Binance will focus on building practical tools, continue to expand the team, and provide support for promising projects.
Looking at the development of the encryption industry, the market downturn is just a self-adjustment of the industry's growth. We believe that when the next bull market comes, crypto finance will be more benign and mature. The cornerstone leading to the future is being built and consolidated.