Binance.US seeks to raise $50 million in fresh seed funding
Binance.US, the American outpost of the world’s biggest crypto exchange, is reportedly looking to extend its seed round with a follow-on fundraise of up to $50 million.
It will be Binance.US’ second fundraising in two months, after the 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 has launched its operations in the US market in late 2019 via a partnership with a FinCEN-registered company, BAM Trading Services. The exchange has licensed its matching engine and wallet technologies to its US partner, which handles operations in compliance according to local regulations.
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 US arm of the world’s biggest crypto exchange and its CEO Brian Shroder had allegedly mislead them and failed to comply with federal and state securities laws.
Similar cases arose a few years ago after the US regulators cracked down on initial coin offerings (ICOs). However, while the SEC has pursued cases against token issuers, such as its current dispute with Ripple, and market participants such as BlockFi, but the SEC has not yet taken action against platforms or exchanges listing them.
Binance currently offers crypto spot trading to both retail and institutional clients. However, it is required to comply with all federal and state laws, including ‘know your customer’, anti-money laundering and related regulations.
Money Transmitter licenses enable Binance.US to provide its services in 45 out of 50 US states as an independent offering to its customers, without relying on a third party. The exchange is also available in eight territories and plans to expand services to all US states and territories in the future.