The exchange has been enmeshed in a game of cat-and-mouse with international authorities — and has no apparent plans to settle
By Alissa Fleck
Despite facing regulatory peril, Binance Launchpad just completed its third successful ICO — increasingly being referred to as an IEO (Initial Exchange Offering) — of 2019. This most recent sale raised $4 million for Celer Network (CELR) as all tokens sold within 17 minutes. Prior sales for BitTorrent and Fetch.AI raised $7.2 million and $6 million, respectively.
Binance, one of the largest operating international exchanges, was founded in Hong Kong in 2017, but today calls Japan home due to China’s hostile crypto regulations. Shielded by Japan’s friendly laws, the company continues to launch ICOs. Supporters hope the company’s stubborn optimism might even reinvigorate the distressed ICO market.
It may come as a surprise that the Launchpad allows companies to register their ICOs — and only ICOs. STOs are not welcome at this time. The Binance team has said it’s committed to launching one new token every month throughout 2019.
Binance’s modus operandi has been peripatetic, to say the least. The company has, on several occasions, relocated its headquarters to avoid government sanctions — taking it from China to Japan, then Malta, Singapore, Bermuda and Uganda. While the Exchange is committed to remaining decentralized, having government backing could put an end to the frenetic game of regulatory tag.
The question is, then, where to settle?
Many territories are restricted from participating in Binance Launchpad’s sales of sales, including the U.S. Even some markets that technically allow ICOs are keeping the platform at arm’s distance. In the meantime, Binance clambers to keep up with government sanctions.
Why go to so much trouble? Because ICOs are profitable for Binance on several fronts.
For starters, Launchpad ICOs must use Binance’s own $BNB coin. This caused a problem at first, when approximately 35,000 $BNB holders were unable to access the Celer sale due to platform glitches. This resulted in a 4.22% crash for $BNB. The price has since begun to recover, and Binance is clearly bullish on its own ICO-backed $BNB price drives. As more tokens are launched using $BNB, trading volume naturally increases. High volume is typically good for price action.
Then there’s the token sale mechanics. Anyone wishing to buy Launchpad-based tokens must naturally become Binance members. They must buy BNB tokens — again, driving volume. As with any other exchange, every coin and token purchase comes with a transaction fee.
Further, Coinflip just announced a collaboration with Binance to allow the purchase of BNB tokens at 150 ATMs, driving even more interest to the token.
With Launchpad, one could argue that Binance is the first vertically integrated crypto business. They’re certainly doing something right — even in this bear market, some analysts estimated Binance’s earnings to be as much as $450 million in 2018. Imagine what happens when the market recovers.