Binance's transformation: Compliance, Diversity, and Renewal

Author: ChainCatcher

Having just emerged from the rather difficult year of 2022, people are now facing a series of blows in 2023.

First, the collapse of Silvergate and Silicon Valley Bank triggered a crisis of confidence in the cryptocurrency industry. Then, the prices of mainstream currencies like BTC have fallen sharply from their highs at the beginning of the year, bringing confidence in the cryptocurrency market to a freezing point. Later, the high-pressure regulation from the U.S. SEC and other departments cast a shadow over the industry.

Undoubtedly, for industry practitioners, 2023 is a year of caution and optimism. Despite numerous market disruptions, the cryptocurrency industry has still made significant progress in 2023.

On one hand, the cryptocurrency secondary market has welcomed a long-awaited bull market, which not only greatly enhanced industry confidence but also brought in a massive influx of funds, allowing project development to receive more support.

On the other hand, continuous technological innovations and product upgrades have emerged, driving the progress and development of the industry. Innovations in areas such as RWA, DePin, and BRC20 have provided investors and users with more opportunities and choices. At the same time, more large companies and financial institutions have begun to accept and participate in the cryptocurrency market, contributing to its legalization and mainstream adoption.

Beyond the iceberg and flames, Binance, as the leader of cryptocurrency exchanges, has still traversed the cycle, moving from the wilderness of 2023 towards rebirth.

High Growth, Leading the Industry Frontier

In fact, with the expansion of the market and the popularity of cryptocurrencies in recent years, Binance has achieved complete leadership in terms of market share expansion, user growth, and influence in listing discussions.

Data shows that by the end of 2023, Binance had accumulated 170 million registered users, with a 30% increase in registered users (an addition of 38 million users), and offered 1,785 trading pairs across 431 different assets. This is mainly attributed to the positive impact of Binance Launchpad and Launchpool. Looking at its development history, although it was launched for a short time, Binance Launchpad has hosted some of the most successful projects in the market, becoming the sector most likely to produce hundredfold returns.

In the investment market, participating in new listings has always been a high-probability investment method and the easiest opportunity to realize wealth dreams. Joining Binance has become the first choice for the vast majority of investors.

In the recent Launchpool mining activities for new tokens like AI, NFP, and ACE, the stablecoin mining yield for users in a single cycle (7 days) has generally been between 0.5% and 1.5%. This means that as long as users participate continuously, the monthly yield can reach over 4%, far surpassing most financial products.

Such beneficial phenomena are clearly a result of Binance sharing its brand effect and industry status benefits with ordinary users, and with a time span of four to five years, it effectively enhances user loyalty and trust in Binance, a value that cannot be replaced by the marketing activities of other new exchanges.

In short, the product itself creates value, user growth conveys value, and the ultimate goal is to complete value conversion. Binance's Launchpad is a new type of investment method that benefits all three parties, attracting user attention and recognition while meeting user interests, thereby enhancing user recognition and loyalty to the exchange.

In the past year, Binance has continuously launched new trading features and optimized trading algorithms, providing users with efficient and stable trading services. Additionally, Binance has actively explored innovative applications of blockchain technology, launching a series of blockchain-based financial products and services.

These initiatives have also led to significant growth for Binance in cryptocurrency payments, peer-to-peer trading, and earning services. Data shows that Binance Pay has seen a 20% growth in its active user base, riding the wave of cryptocurrency payment popularity. Over 3,500 new Pay merchants and partners globally accept cryptocurrencies for goods and services, supporting the increase in adoption rates.

Furthermore, to meet the demand for engaging Web3 social experiences, Binance Square has undergone an upgrade (Binance Square), creating a portal to a rich world of Web3 content. By the end of the year, Binance Square surged from just 1,200 creators and fewer than 700,000 daily active users to a community of 11,000 creators and 1.6 million daily active users. The P2P platform now supports 970 payment methods and 112 fiat currencies, with transaction volume increasing by 18% year-on-year and the number of users served growing by 39%. Binance Earn has also seen growth, with the Simple Earn product suite now supporting 362 assets, a 35% year-on-year increase in users, and a 16.8% increase in TVL. With the further development and popularization of the cryptocurrency market, Binance is expected to maintain its leading position and attract more user registrations.

Seizing Opportunities, Injecting New Vitality

Of course, as the leading exchange in the cryptocurrency industry, Binance not only focuses on its trading business but also actively builds a complete cryptocurrency ecosystem.

Binance Labs, as an important part of the Binance ecosystem, invests in and incubates excellent blockchain projects, providing rich application scenarios and business models for the industry, continuously enriching and improving the Binance ecosystem, and offering users more service and product choices, thus promoting the development of the entire ecosystem.

According to Rootdata, in 2023, Binance Labs participated in investments in 30 projects, covering areas such as DeFi, infrastructure, gaming, and AI, with many projects receiving investment during their seed and angel rounds, and some even reaching Series B.

In addition to investments, Binance Labs also provides comprehensive support for startups through its incubation program. Incubated projects can receive technical, business, and strategic support from Binance, as well as leverage Binance's global network and resources to quickly achieve commercialization and market expansion.

Staying True to Its Core, Upholding Security and Compliance

The most sensational news in the cryptocurrency industry in 2023 was undoubtedly CZ's exit.

November 21 was an extremely important day for the entire cryptocurrency industry. Binance co-founder and CEO CZ appeared in a federal court in Seattle, and as part of a settlement agreement with the U.S. Department of the Treasury and the Commodity Futures Trading Commission (CFTC), Binance agreed to plead guilty to criminal charges and pay a fine of $4.3 billion, the largest fine in the history of Chinese entrepreneurship. New CEO Richard took over from CZ. In an open letter, CZ pointed out that Richard would lead Binance into the next growth phase with his thirty years of experience in financial services and regulation, ensuring the company's development in safety, transparency, compliance, and growth.

Although there were some voices at the time suggesting that Binance and the entire cryptocurrency industry would face enormous risks, the reality is that the brief pain did not affect Binance's prioritization of user asset security and transaction compliance. This directly led to a slight drop in the value of Binance's user wallet assets, which quickly rebounded to their original position, rising from $66 billion at the end of November to $82.3 billion at the beginning of 2024, with overall capital inflow ranking first among all exchanges.

Source: DeFillama

This year, Binance also timely launched a Web3 wallet. The wallet is directly integrated into the Binance app, allowing users to manage crypto assets, perform multi-chain token swaps, earn yields, and interact with multiple blockchain platforms. This initiative provides users with a more convenient and secure experience for storing and using digital assets.

In January of last year, following the emergence of the Bitcoin Ordinals protocol, BRC20 and Ordinals assets sparked a wave on the Bitcoin chain. However, due to the lack of adequate infrastructure for BRC20 and high transaction fees, users found it inconvenient to trade new assets like BRC20 and ARC20. After launching the Web3 wallet feature, Binance may change this situation, especially since Binance co-founder He Yi has publicly stated that more attention will be paid to the BRC20 ecosystem, bringing the world's largest crypto application user base closer to the BRC20 ecosystem and jointly promoting market development.

Additionally, in terms of compliance, Binance has invested $213 million in its compliance program in 2023, strengthening its compliance technology, processes, and talent. This figure represents a 35% increase compared to last year's $158 million. Such a substantial investment aims to enhance Binance's compliance capabilities and risk control levels, ensuring that it meets various legal and regulatory requirements in its business operations.

Moreover, while protecting its ecosystem's legality and compliance, Binance has also actively collaborated with law enforcement agencies worldwide, responding to 58,000 law enforcement requests. This not only strengthens Binance's compliance and security but also helps combat illegal activities and protect the public interest. By the end of this year, Binance held licenses, registrations, and authorizations in 18 jurisdictions globally, more than ever before, effectively countering the naysayers.

Broadcasting Seeds, Promoting Inclusive Content Education

Nowadays, with the rapid development of the blockchain and cryptocurrency industry, on-chain ecosystems and new concepts are constantly emerging, and more and more people are becoming interested in this field. However, due to a lack of sufficient understanding and knowledge, many may be misled or develop misconceptions.

As a leading global cryptocurrency trading platform, Binance has a responsibility to contribute to society. In addition to performing its core duties as an exchange, Binance is also committed to meeting user learning needs and promoting education and dissemination in Web3, supplying the industry with professionals, while also ensuring that systematic and professional content achieves inclusivity and fairness, narrowing the digital divide.

In 2023, Binance Academy helped 27 million learners deepen their understanding of the digital finance world in 31 languages. In addition to online education, Binance Academy's global university tour covered 45 countries, providing blockchain learning opportunities for 10,000 students worldwide.

The blockchain and cryptocurrency fields require a large number of professionals to drive their development. Through inclusive content education, Binance can cultivate more professionals, providing talent support for the industry's growth. At the same time, these talents can also become potential users and partners of Binance, promoting Binance's own development.

The Light Boat Has Passed Through Ten Thousand Mountains

Looking back at 2023, Binance has achieved remarkable accomplishments in the global cryptocurrency industry. Whether it is launching multiple innovative products and services, including the Binance Web3 wallet and SAFU fund, providing users with more diversified choices and comprehensive protection, or continuously investing significant resources in technological research and development to enhance the platform's technical strength and security, or actively exploring applications of blockchain technology and DeFi to inject new vitality into the industry's development, Binance has undoubtedly traversed the cyclical fluctuations of the cryptocurrency industry.

Through hardships and difficulties, success is achieved. In 2023, Binance resolved long-standing compliance issues, promoting the establishment of new products, systems, and use cases, and making reasonable project investments, delivering a stable and positive report card to users and the cryptocurrency industry by the end of 2023.

In its six years of establishment, Binance has consistently sought new changes in technological innovation and globalization strategies, while remaining steadfast in protecting users and building compliance and security. In the future, we sincerely hope that Binance can continue to uphold the principles of innovation, openness, and compliance, creating a sustainable platform for 50 years and leading the development of the industry.