No FTX, no problem! Binance is all fired up amid crypto winter

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The recent FTX fiasco has probably led some folks to believe that the crypto winter is a relatively new phenomenon. On the contrary, this blizzard has been raging for around a year now, with Three Arrows Capital, Hodlnaut, Voyager Digital, and Celsius as some of its other high-profile victims.

The end seems to be far from sight as this crisis is expected to last three more years – at least according to Binance CEO Changpeng Zhao.

But the Chinese-born Canadian mogul, who goes by “CZ,” is confident that his company – the world’s largest crypto exchange – is not only weathering the storm but has also been thriving so far.

For instance, Binance’s market share stood at 76.4% as of January – a sizable jump from the already market-leading 48.7% it held in Q1 2022. It is also one of the few firms to survive the previous year without any job cuts. In fact, it claims to have hired around 5,000 employees in 2022.

In today’s premium, Tech in Asia details how Binance strengthened its grip on the crypto world. It also assesses headwinds, including well-founded concerns over the use of native exchange tokens and a significant fall in crypto trading volumes, that could potentially derail the company.

Today we look at:

• How Binance is thriving amid the ongoing crypto crisis
• A US$200 million investment into fintech unicorn PhonePe
• Other newsy highlights such as the latest round of layoffs at Meta

Premium summary

Conquering crypto winter

Image credit: Timmy Loen

FTX’s fall from grace was bound to leave a gaping hole in the crypto sector, considering it was the world’s third-biggest crypto exchange when its liquidity issues came to the fore. The collapse of its rival incentivized Binance, but it certainly wasn’t the only reason behind the remarkable rise in its market share.

David Moreno Darocas, research lead at CryptoCompare, highlighted a host of key factors in Binance’s strong performance amid crypto winter.

• Earn the right to stay at the top: The platform offers features that make it stand out in a crowd of competitors, such as extensive security procedures and no fees for spot trades on Bitcoin and Binance USD (BUSD) swaps. According to CryptoCompare’s report, Binance implemented zero-fee trading in July.
• Tough times ahead?: Since 2019, New York-based Paxos has managed the minting and redemption of BUSD under a licensing agreement with Binance. Paxos halted the minting of BUSD in February to comply with regulators, a move that was seen by many as a precursor to a lawsuit from the US Securities and Exchange Commission.
• Market on edge: Despite Binance’s market dominance, the volume of transactions on centralized exchanges has fallen considerably. Trading volume on these platforms in 2022 slipped 46.2% from the year before, according to the report. However, transaction volumes started to rise again this year.

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