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Crypto exchange Binance.US hits $4.5 billion valuation

Illustration of a pattern of hands trading tokens.

Illustration: Gabriella Turrisi/Axios

Cryptocurrency exchange Binance.US raised $200 million in a seed round at a pre-money valuation of $4.5 billion.

  • Investors include RRE Ventures, Foundation Capital, Original Capital, VanEck, Circle Ventures, Gaingels, and Gold House.

Why it matters: The fundraise comes as money is pouring into crypto exchanges in the U.S. and worldwide, as investors seek high growth, alternative assets at a time when macro-economic clouds weigh on the global economy.

Of note: As these crypto assets go mainstream, the exchanges they are traded on are attracting capital and achieving massive valuations.

  • Last week, crypto trading and wallet startup raised an undisclosed amount at a $14 billion valuation.
  • In January, global crypto exchange FTX raised $400 million at a $32 billion valuation, and FTX US raised another $400 million at an $8 billion valuation.
  • FTX raised funds to make acquisitions and other investments — and it did just that yesterday by putting money into stock exchange IEX Group.

Context: Binance — founded by CZ Zhao, now one of the wealthiest people in the world — is the world’s largest crypto exchange by volume, but its U.S. affiliate is quite a bit smaller.

  • That’s partly due to being just three years old and partly due to local availability, as Binance.US is accessible in just 45 states in the U.S. and is missing in key markets like New York, Texas, Vermont, Idaho, and Hawaii.
  • Two states — Connecticut and Louisiana — were added just this year.

At the same time, Binance.US has been ramping up its local executive ranks, hiring former Ant Group and Uber China exec Brian Schroder as its CEO last October.

  • It also recently brought on chief risk officer Sidney Majalya, general counsel Norman Reed, chief compliance officer Tammy Weinrib, and chief people officer Carol Mackinlay.

The intrigue: Binance and Binance.US have both had run-ins with regulators in the states and abroad.

  • Binance has historically not had a global headquarters, which has been a point of contention with global regulators seeking jurisdiction of the exchange — but that could soon change.
  • In the meantime, the U.K. Financial Conduct Authority banned Binance from carrying out regulated activities there. The exchange has also run afoul of regulators in Japan, Canada, and Thailand.
  • And in the U.S., the SEC is probing the relationship between Binance.US and two trading firms with ties to Zhao, per the WSJ.
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