Binance.US drops Ethereum trading fees to zero
Binance.US, the US affiliate of the world’s largest crypto exchange, said it is eliminating fees on spot Ethereum trading for all customers.
The move announced Wednesday effectively allows customers to trade the second biggest cryptocurrency for the US dollar, tether, USD Coin and BNB —or vice versa—without paying spot trading fees. Specifically, the exchange is expanding its zero-free policy to include ETH/USD, ETH/USDT, ETH/USDC and ETH/BUSD.
Binance.US will also offer additional trading fee discounts to customers who pay their trading fees with its native token. The move will increase pressure to lower fees for other crypto exchanges, which will have to trim fees as competition heats up.
Earlier in June, the American offshoot of the world’s largest crypto ecosystem started to offer zero-fee trading for Bitcoin, with plans to eliminate the charges for more tokens in the future. At the time, Binance.US said the move aims to attract more users and generate revenue from other sources, such as its staking service.
Although the move mimics no-commission stocks trading, a trend pioneered by a few high-flying apps, Binance.US is also not earning a spread on no-fee transactions. That differs from Robinhood and similar platforms that earn money by receiving rebates from venues to which it routes retail users’ orders.
Binance.US was reportedly looking to extend its seed round with a follow-on fundraise of up to $50 million. The three-year-old cryptocurrency exchange raised about $200 million in April at a pre-money valuation of $4.5 billion. While it has seen greater trading volumes than other rivals in the US, Binance.US still trails far behind Coinbase.
Last year, Binance CEO Changpeng Zhao said that depending on business growth, Binance.US is eyeing a potential IPO route to go public within three years. At the time, CZ added that Coinbase, which became the first crypto exchange to go public, helped set up a playbook for crypto firms to do IPOs.
Although the company generated $800 million–$1 billion in profit last year, Binance.US was looking at a proper way to get VC money in a bid to reduce its dependence on the global parent entity.
Binance.US has seen plenty of news headlines in recent times as regulatory focus returns to the crypto space. Most recently, a group of investors who bought TerraUSD (USTC) and its sister cryptocurrency Terra (LUNC) through Binance.US filed a class-action lawsuit.
The plaintiffs say the crypto exchange and its CEO Brian Shroder had allegedly mislead them and failed to comply with federal and state securities laws.