Crypto exchange Binance is planning an initial public offering for its US arm within the next three years depending on business growth, CEO Changpeng Zhao told The Information in a recent interview.
“Binance.US is just going to do what Coinbase did,” Zhao told the tech-based publication in a Zoom interview published Wednesday.
He suggested Binance has an edge over Coinbase in terms of cost structure. “The users using Binance.US pay about one-fifth of the fees that they pay on Coinbase – so it’s about five times cheaper,” he said.
Some experts said Coinbase’s public listing, the first for a major crypto exchange, was for crypto what Google’s IPO was for the internet.
Without mentioning any names, Zhao said Binance.US is about to close a “large” private fundraising round in the next two months that should reduce his control of the board. It plans to IPO after that, he said.
“If the business can grow consistently over the next three years, then three years should be sufficient for an IPO, but if there’s a prolonged bear market for, I don’t know, maybe three or five years, then it may be a little bit longer,” he added.
Binance has recently been under fire over a series of regulatory clampdowns around the world, which have prompted the company to double the size of its global compliance team by the end of 2021. Binance has been slapped with multiple warnings and banned from operating in some jurisdictions due to failure to register with local regulators.
Founded in 2017, Binance offers hundreds of cryptocurrencies for traders around the world. Its ambitions for an IPO follows a mass adoption of cryptocurrencies in the last year, with more traditional finance companies beginning to incorporate digital assets into their client offerings.
The company generated profits as high as $1 billion in the last year, triple the net income posted by Coinbase in the same period, Zhao told The Information. While Binance US is the American partner of Binance, profits from the US unit are independent.
Before pursuing a stock market debut, Binance US will have to find a new leader since Brian Brooks resigned as CEO after just three months in the position. Zhao suggested one among the company’s new senior hires could become his replacement.
“Binance.US has hired a few senior people already and any one of them could be the future CEO,” he said.
Zhao himself has said he’s open to stepping down as CEO of Binance, in favor of someone who has a more current approach to compliance. “If you have a CEO for longer than 10 years, that’s a lot of time-the organization probably has a lot of stale thinking,” he said. “Four to five years is probably a good time frame. Presidents only do four-year terms.”
“I think those things are interesting. I’m not against those projects,” he said. “I like those projects, but I don’t have time to deal with many different cryptocurrencies.”