Crypto exchange behemoth Binance has officially acquired CoinMarketCap (CMC) — the most popular cryptocurrency trading data provider in a move that has sent tongues wagging in the industry. The news confirms earlier reports of Binance looking to purchase CMC for $400 million.
Some pundits in reaction to the development question whether the CMC acquisition by Binance will be healthy for the competitiveness of the crypto exchange market at large. CMC becomes the latest high-profile purchase by Binance as the company continues to pursue an aggressive expansion plan.
Binance and CMC Announce Success of Acquisition Deal
In a blog post published by CMC on Thursday (April 2, 2020), both companies acknowledged the acquisition deal with Binance CEO Changpeng Zhao electing not to provide specific details about the purchase amount. Reports from earlier in the week put the figure in the $400 million ballpark.
Welcome to the #Binance family @CoinMarketCap ????
— Binance (@binance) April 2, 2020
Following the deal, the pseudonymous CMC founder and CEO’s Brandon Chez steps down from running the business with the company’s Chief Strategy Officer Carylyne Chan stepping in as interim boss. Commenting on the development, Chez remarked:
“I believe that of all the teams in the space that could acquire CoinMarketCap, Binance is one of the very best options. They are a team that have shown, time and again, that they care about their users and will do the best for them, even in the most challenging of times… I am thrilled to be passing the baton on to Carylyne and the CoinMarketCap team to continue fulfilling my original vision of showcasing the crypto revolution.”
Since its creation in 2013, CMC has gone on to become the most popular cryptocurrency website and is the top-ranked crypto website according to Alexa rankings. The platform has come under some scrutiny in recent times for allegedly promoting scams like Bitconnect and not doing enough to combat wash trading and spoofing by errant crypto exchange platforms.
Worries of Crypto Exchange Market Monopoly
Given CMC’s popularity in the crypto trading scene, its acquisition by Binance has led some pundits to highlight the potential for the latter to enjoy certain unfair advantages over its competitors like Coinbase.
With CMC recording close to 40 million visits in February 2020 alone, some commentators say Binance might be able to capture a significant portion of CMC’s internet traffic via targeted banner ads on the data provider’s website.
CMC’s new interim CEO, Chang responded to these concerns in a letter to its users stating:
“CoinMarketCap will continue to be run independently, as an independent entity, from Binance. Decisions will be made according to the best interests of CoinMarketCap, meaning that we will continue to develop products and services that benefit CoinMarketCap users, and continue working with partners and customers in a way that benefits them and brings the greatest value to them.”
According to Chang, CMC will maintain transparency in its listing process for crypto projects as well as other exchanges.
Binance Unrelenting in Rapid Expansion Drive
At the start of the year, Binance CEO Zhao told users that the platform was pursuing two major acquisition deals as the company continues its rapid expansion.
Back in 2019, Binance acquired Indian crypto exchange platform Wazir X while creating fiat on-ramps for multiple national currencies despite a $40 million Bitcoin (BTC) hack in May 2019.
Following issues regarding unclear regulations in the U.S., Binance created a separate trading platform for crypto traders in the country at a time when others were either geofencing or moving their operations overseas.
As previously reported by Blockonomi, the company has established a research institute in Shanghai, China focused on blockchain technology research.
