I’ve written about the tech industry for ten years but never can I recall a firm becoming so dominant so fast as Binance. The exchange came out of nowhere in mid-2017 and rapidly gobbled up a huge share of the crypto trading business, while also launching its own currency–Binance Coin–that now has a market cap over $3 billion, and is the seventh most valuable cryptocurrency in the world.
How did Binance pull it off? A big part of its success lies in a feat of regulatory arbitrage, which has seen Binance skip from country to country in order to avoid serious scrutiny from governments. In doing so, Binance further minimized its legal exposure by focusing on crypto-to-crypto trading and avoiding the heavily regulated fiat banking system.
Steering clear of regulators is only one reason for Binance’s success. Another key factor is its launch of a cryptocurrency that’s actually useful. In a shrewd move, the company tied the use of Binance Coin to trading discounts, and also introduced a so-called “burn” program to purchase and destroy…