Binance Targets Mainstream Names to Drive Blockchain Adoption

Key Insights:

• Binance aims to acquire mainstream companies to drive blockchain tech adoption.
• Following a Forbes strategic investment, a partnership with Eqonex drew comment from the FCA this week.
• More regulatory scrutiny is likely as Binance applies an industry-agnostic investment strategy.

It has been a busy start for the global crypto exchange Binance. Since last year, Binance has more frequently faced the wrath of regulators.

Increased regulatory scrutiny, as a result of a surge in illicit activity, has led to calls for a global crypto regulatory framework.

These include but are not limited to regulators in Canada, India, the UK, the US, and Singapore. Despite increased scrutiny, Binance continues to expand globally.

Binance CEO CZ Opens Up

This week, Binance CEO CZ reportedly said:

“We want to identify and invest in one or two targets in every economic sector and try to bring them into crypto.”

CEO CZ aims to introduce blockchain tech into established industries rather than build Binance into a multinational conglomerate.

Binance could face resistance from regulators, however. Following numerous brushes with regulators, concerns over Binance’s influence on listed companies could lead to investigations and interventions.

The anticipated M&A activity will involve regulators in several prominent jurisdictions, including the UK and the US.

Recent Binance Activity Draws Regulatory Scrutiny

With Binance under the watchful eye of regulators, recent investments have raised eyebrows.

Last month, Binance took a $200m stake in Forbes to support its digital transformation. It remains to be seen whether Binance will draw regulatory scrutiny due to the investment. In the UK, regulators were more responsive to another Binance partnership.

This month, Binance partnered with Eqonex, a NASDAQ-listed crypto shop. According to media reports, the deal gives Binance control over Eqonex.

On Monday, Eqonex announced the partnership with Binance’s latest affiliate Bifinity. According to the Eqonex press release, Bifinity will have the right to appoint, from within Bifinity, the Chief Executive Officer, Chief Financial Officer, and Chief Legal Office of EQONEX.

In response to the announcement, the UK’s Financial Conduct Authority (FCA) reportedly warned that it could cancel or suspend the registration on several grounds, including non-compliance with Money Laundering (AML) Regulations.

Earlier this month, a Binance partnership with PaySafe also drew comment from the UK’s FCA.