Binance Purchases Wallet Company Trust Wallet
Leading cryptocurrency exchange Binance announced today the purchase of crypto wallet Trust Wallet. CEO Changpeng Zhao also published a blog post about his “typical day,” but failed to mention the controversy surrounding Malta, the company’s new home.
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Binance to Offer Integrated Wallet Solution
Binance, one of the largest crypto exchanges in the world, said on July 31st that the purchase of Trust Wallet would give Binance users access to a non-custodial mobile wallet. Trust Wallet supports 20,000 Ethereum-based tokens, including ERC20, ERC223, and non-fungible ERC721 tokens. The financial terms of the deal were not disclosed.
Trust Wallet, which is open source, allows users to hold their own private keys, which are inaccessible to the company. Further, Trust Wallet doesn’t collect any personally identifiable information, only recording public wallet addresses and contact information.
Binance said that Trust Wallet will continue to have “autonomy and freedom to develop the core product,” while benefiting from Binance’s user base. Binance added in a statement that:
“As a technology driven company, Binance’s acquisition of Trust Wallet shows the importance of secure wallet technology for the future development of cryptocurrency as a whole. As Binance’s first public acquisition, we hope to continue providing our users with improved security, services and support.”
Binance Growth Unprecedented
Binance, which launched just a year ago, has grown at an extraordinary rate. It held an ICO last July that raised $15 million USD, and since then its BNB coin has grown in value from around ten cents to a current price of just under $15. Previously based in Hong Kong, it relocated to Japan before announcing in March that it was moving its operations to Malta, an E.U.-member state in the Mediterranean.
The exchange drew attention earlier this month when CEO Changpeng Zhao told Bloomberg that the firm’s net profit in the first half was $300 million, and that he expected a profit of $500 million to $1 billion in 2018. He also said that Binance had ten million users and that average daily turnover was around $1.5 billion. That news came a few weeks after the company announced it was opening a fiat-crypto exchange in Uganda that would support local currency trading pairs. It also announced in March that it would be creating a decentralized exchange.
A Day in the Life of “CZ”
Zhao, who is 41 and, in a practice common among Chinese businessmen, goes by his initials CZ, has received his fair share of media attention recently. He appeared on the cover of Forbes magazine’s Richest People in Cryptocurrency edition in February. The magazine estimated his net worth at $1.1 to $2 billion.
In what is perhaps an acknowledgment of his newfound celebrity, Zhao published a blog post entitled A Typical Day for Binance CEO on the same day as the True Wallet announcement. In the post, Zhao gives the impression of being a down-to-earth businessman on a mission to get crypto adopted worldwide.
In the piece, he addresses some recent controversies that Binance has been associated with, saying that there were allegations on Reddit that the community voting system for listing new tokens was being manipulated (possibly in this thread). But he says that Binance has only received $9,000 in fees, not the $2.2 million alleged. Though conceding some issues in this area, Zhao said his team was capable of sorting them out.
Journalist Murdered in Malta
Zhao’s decision to set up operations in Malta means he has tied Binance to a country that has recently been engulfed in controversy over the murder of investigative journalist Daphne Caruana Galizia. She was killed by a car bomb in October 2017 after publishing articles on the links between the inner circle of Maltese Prime Minister Joseph Muscat and shell companies revealed in the Panama Papers.
Specifically, Caruana Galizia alleged connections between Muscat’s wife and two of his aides with offshore companies that had been linked to the sale of Maltese passports to wealthy Russians and other foreigners. The chief of the opposition party, Adrian Delia, called Caruana Galizia’s death a political murder. Afterwards, Muscat said that American FBI officials had been asked to help with the investigation. The Maltese government also offered a €1 million reward for information leading to the arrest of Caruana Galizia’s killer.
In recent years, Malta has become known for allowing foreign subsidiaries to register easily in the country and receive favorable tax treatment, as well as allowing online gambling firms to operate in its jurisdiction. As investigated by Caruana Galizia, its cash for passports scheme allows rich foreigners to buy access to the E.U.
With the arrival of Binance, Malta is now angling to become a home base to cryptocurrency firms, some of whom have a poor reputation for financial transparency.
Have your say. Is Binance right to pivot toward a jurisdiction engulfed in recent corruption scandals? Is there any way to avoid that, no matter where it sets up shop?
Images via Pixabay