The hype surrounding cryptocurrencies continues to build momentum unabated, but the sector itself struggles with issues ranging from security to regulation and user experience. At the heart of the problem is a fragmented market that makes real growth difficult. Moreover, for many exchanges—which are the foundation for a large part of the crypto market—providing services that add value while remaining compliant is a challenging proposition.
Binance, the world’s largest crypto exchange by trading volume, has shown a willingness to move past this barrier by partnering with services that enhance its value proposition while expanding its reach. Most recently, the exchange made headlines when it announced its first ever outright purchase of a company.
The company’s acquisition of Trust Wallet, a decentralized crypto wallet service that also features a browser for decentralized applications (dApps), will help Binance offer a more comprehensive service for users while still keeping to its privacy-oriented model.
With such an intriguing story, I was curious about the ripple effect that would be felt across the industry.
I had an opportunity to sit down with Binance’s mercurial CEO, Changpeng Zhao, to discuss the acquisition and his thoughts on the current market, Binance’s exchange, and more.
Yoav Vilner: The Trust Wallet acquisition is big news for the industry, and it shows how successful Binance has become. How much did the company pay to acquire Trust Wallet?
Changpeng Zhao: In my opinion, the valuation was very reasonable, and for what we received, very worthwhile. I believe Trust wallet is the best product in the on-chain mobile wallet category. Given its relatively recent entry to the market, Trust Wallet hasn’t had an opportunity to reach a large audience yet. I was also impressed by the quality of the team behind it, so I think it’s a real diamond in the rough. I think the Trust Wallet team was also comfortable with the valuation we agreed upon. The value of their brand, along with the exposure Binance can deliver will offer much more beyond the monetary value of the deal. Therefore, I think it was a good deal for both sides
Vilner: What are your plans for incorporating Trust Wallet’s services into your existing offerings and operations?
Zhao: We’re planning to continue developing the Trust Wallet brand and line of products independently and making its services available to any Binance user who wants to maintain control over their own funds. Our goal is to keep Trust Wallet as an independent product line. We understand it’s the team’s baby, and we’re more like a godfather. In fact, we plan on migrating more services to Trust Wallet, including a tighter integration with our own decentralized exchange, Binance Chain.
Each company’s products and services are very complementary and exhibit minimal overlap. What unites us are the values and missions both our teams promote. Product-wise, Trust Wallet is an on-chain decentralized wallet that gives users 100% control over their funds and private keys, whereas Binance is a centralized exchange that holds custody of our users’ funds. Now, users will have both options at their disposal within our ecosystem.
We also found that while Trust Wallet has a strong product and an amazing team, they don’t really have an infrastructure for public relations, customer support, HR, and other critical back-end operations. Binance will help them by filling those gaps. The acquisition also means that Trust Wallet will be able to skip the fundraising process since we will be providing full financial support for the project. Finally, the Trust Wallet team will officially become a part of the Binance family, and we will be lending our brand support and marketing efforts.