Watch out, Coinbase: Binance is moving into your home turf.
Adept at regulatory arbitrage among many things, cryptocurrency exchange giant Binance has been no stranger to making moves — both figuratively and literally — to consolidate and expand its global presence. The exchange is keeping the flex streak strong with America next up on its slate, as company leadership confirmed this week that a Binance U.S. platform was forthcoming.
Binance Blocks US Customers
Ahead of their planned move to a regulated exchange in the US, Binance this morning revamped their internal policies to now exclude the ability for traders in the US to use their platform. By September this year, US customers will only be able to access their wallets but not place any trades on the exchange.
Their updated policy, as of 14th July 2019 states:
Binance is unable to provide services to any U.S. person
Users will likely be able to get around this block by using a VPN as Binance currently allows a 2BTC withdrawal limit per day without having to go through the KYC procedure.
New Platform in the Works
Binance, whose main headquarters currently lies in the Southern European island of Malta, will partner with a San Fransisco-based firm named BAM Trading Services to make the platform a reality.
A company under the name of BAM Trading registered as a Money Services Business with the U.S. Treasury’s Financial Crimes Enforcement Network, or FinCEN, on Thursday.
Little beyond that is known about the startup for now, though the company’s registration did list a “direct correspondence” instruction to the address of Koi Compliance, a wing of the cryptocurrency trading desk firm Koi Trading that Binance’s incubator division Binance Labs invested $3 million USD into earlier this year.
As part of the partnership, BAM Trading will operate Binance U.S., whereas Binance proper will provide the underlying tech, namely its matching engine and wallet systems. On the news, Binance founder and chief operating officer Changpeng Zhao commented:
“Binance US will be led by our local partner BAM and will serve the U.S. market in full regulatory compliance.”
The pivot comes as the exchange announced earlier this month that it would be geoblocking American users (as well as users from 28 other countries) from Binance DEX, the company’s long-awaited decentralized exchange.
That geoblocking is to come into effect on July 1st. It’s a move designed to keep the DEX on the right side of the U.S. Securities and Exchange Commission (SEC), who might otherwise find the DEX to be an unregistered securities exchange. As for Binance U.S., Zhao and his team haven’t yet declared when its launch can be expected.
The penetration into America’s cryptoeconomy market is only the latest expansion-minded advancement Binance has made in general.
For example, the exchange had also revealed in early June that it was going to develop its own stablecoins. The company’s chief financial officer Wei Zhou confirmed as much in comments to the press, noting at the time that the exchange’s leadership was planning to publicly release the in-house stablecoins “in a matter of weeks to a month or two.”
Zhou said the exchange wouldn’t create a token pegged to the U.S. dollar as part of that campaign, though he did highlight the Japanese yen and the European Union’s euro as currencies selected to be tokenized.
Binance’s look to stablecoins comes as one its main competitors, Coinbase, is working with Circle to advance the ecosystem surrounding the stablecoin backed by their CENTRE consortium, the USD Coin (USDC).
That group has announced exploring the development of a “basketcoin” pegged to several stablecoins of CENTRE’s creation. Moreover, the release of Facebook’s GlobalCoin basketcoin is another thread Binance will have to contend with in the U.S., at least in the stablecoin arena. Facebook is reportedly going so far as to consider opening up physical ATMs for the token, suggesting their influence may soon be far-reaching.
Still, if any cryptoeconomy company is in a position to make stablecoins that will catch on with traders, it’s Binance. And such tokens aren’t the only new foray the exchange is eyeing. Last month, the company revealed it would be imminently launching a margin trading service on Binance.com.
After being hacked out of 7,000 bitcoin (BTC) earlier this year, it’s safe to say the exchange powerhouse has rebounded and is building momentum.