From rookie to the biggest exchange, here's Binance's CEO success strategy

04 Oct, 2018
by Fifi Arisandi
News
From rookie to the biggest exchange, here's Binance's CEO success strategy

Binance's rise from rookie to the biggest exchange in the world today is said to be the result of the CEO's strategy from the beginning to stay away from China. 

Founded in Hong Kong in July 2017, Binance has gone from rookie to the biggest crypto exchange in the world today. The rapid growth may have related to the CEO's wit, which have led the company to execute the right strategy and moves since the beginning. 

Following the Chinese government's regulations to crack down cryptocurrency by shutting down all domestic exchanges in the country, Chang Peng Zhao, or more known as CZ, decided to move the headquarters and servers from Hong Kong to Tokyo, away from the reach of the Chinese authorities. Soon after, the company expanded to the other Asian countries, such as Singapore and Taiwan.

Having just launched the newest trading platforms that allow fiat-to-crypto trading recently, the company targets new customers from countries, such as Uganda, Jersey, Liechtenstein, Malta and Singapore, while remained consistent with their decision of not serving Chinese clients. In fact, Binance banned transactions for users with Chinese IP addresses.

In an interview with the South China Morning Post, CZ said that the company is actually quite passive and more often, it's the governments that invite them to open business in their countries. "If a government doesn’t welcome us, we will definitely not go there,” he added. 

Furthermore, he stated that his company will work with "any friendly jurisidiction", regardless of how small the market seems. 

Arianna Simpson, the founder of US-based cryptocurrency hedge fund Autonomous Partners commented on CZ's expansion strategy, “It's clear that Binance is playing a game of regulatory arbitrage.”

Despite the company's "passive" expansion strategy, CZ actually travels quite often than any other people with similar position. In the past month alone, CZ has traveled to 8 countries, including Swiss and South Korea for various purposes, from hiring new staff, attending events, and striking off deals. That said, he claimed to have never been in the mainland China ever since the crypto crackdown last year. 

Another strategy that has proven to work out well is CZ's strategy to only offer crypto-to-crypto trading when Binance just started, which was totally different with the mainstream back then when fiat-to-crypto trading was very popular. 

While many may have thought that Binance's success is more of luck, Timothy Tam, the co-founder of Hong Kong-based CoinFi refuted the opinion by saying, "Personally, I don’t think it’s luck because he has a track record of working in the trading space."

"He is like the Jack Ma of cryptocurrency: he came out of nowhere and scaled very fast," Tam added. 

CZ refused to comment on the New York State Attorney General's published report last month that listed Binance as one of the violators of the state's virtual currency rules. He also decided to exit from Japan upon receiving a warning letter from the authorities stating the exchange has been operated in the country without license. 

Lastly, he clearly stated his optimistic point of view towards cryptocurrency by saying that if he's not, he wouldn't have opened a crypto exchange in the first place. This opinion is in opposite of Vitalik Buterin's who said that crypto's exponential growth is diminishing soon. 

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