Amid growing government oversight regulations, Binance is looking to diversify revenue streams and further enhance cryptocurrency adoption by acquiring traditional companies in all economic sectors.
On his Twitter account with more than 5.3 million followers, Binance CEO Changpeng Zhao (CZ) shared: "We want to identify and invest in one or two goals in every economic sector and try to bring them into cryptocurrencies."
Holding the title of the world's largest cryptocurrency exchange, Binance is aiming to attract companies from traditional markets in an effort to further strengthen the adoption of cryptocurrencies on a large scale and diversify its own business.
In the interview, Zhao went on to say that pushing traditional companies to adopt cryptocurrencies would put pressure on slow tech adopters and increase competition in the market as a whole.
The announcement comes shortly after Binance's massive $200 million investment in Forbes, in early February 2022, cementing Binance as one of the media company's two largest owners.
#Binance is taking a $200 million stake in @Forbes.
— Binance (@binance) February 10, 2022
“This is the first step into a marketplace that has really high potential when it comes to adoption of Web 3.0 based tools”https://t.co/mDIRMHC4dT
These moves further demonstrate the thriving cryptocurrency industry, which has seen Binance grow to an estimated valuation of around $300 billion and make Changpeng Zhao the 11th richest person in the world.
While cryptocurrency exchanges have previously plastered their logos on stadiums and games at the Super Bowl, the acquisition of a large stake in a well-known media company like Forbes has positioned Binance as a serious player in acquisitions and investments.
Previously, Binance bought companies located in its core business area. Binance acquired cryptocurrency data site CoinMarketCap in April 2020, as well as acquired a majority stake in card payment service giant Swipe by the end of December 2021.
In terms of revenue diversification, attracting traditional businesses beyond digital assets seems like a wise move, 90% of which are now derived from transaction fees on the exchange, CZ said.
News of Binance's ambitions beyond cryptocurrencies comes as the exchange continues to come under increasing scrutiny by regulators around the world.
On March 7, 2022, the UK's Financial Conduct Authority (FCA) issued a warning about the strategic partnership between Binance Bifinity's internal card payment service Bifinity and investment firm Eqonex. A $36 million conversion loan was offered to expand the company's products including Digivault registered with the FCA Agency.
We are aware of recent statements made by Eqonex Limited and the Binance Group confirming that an entity called Bifinity will advance a US$36 million convertible loan to EQONEX. https://t.co/EV7keSHRpa
— Financial Conduct Authority (@TheFCA) March 7, 2022
As a result of the transaction, the FCA representative stated that "individuals and entities that are part of Binance Group may become beneficial owners of Digivault for the purposes of the Money Laundering Regulation," indicating potential legal issues for Digivault.
Binance is also reportedly in talks to get a license to operate in Dubai, according to Bloomberg. This comes as the United Arab Emirates continues to push to become an oasis for digital assets in the Middle East.
