While global markets are experiencing tough times amid the coronavirus pandemic, the crypto industry is getting stronger as its core players have tapped one of the biggest crypto mergers in history.
Binance, the world’s biggest cryptocurrency exchange, has reached an agreement to acquire CoinMarketCap, one of the most-referenced crypto data websites, in an undisclosed deal. The companies officially announced the acquisition to Cointelegraph on April 2.
Changpeng Zhao, founder and CEO of Binance, said that Binance and CMC are very similar, as they are both providers of “access-to-crypto” and share a vision of making crypto assets more accessible and useful for people around the world. Zhao said:
"The acquisition will enable us to build on each other's strengths, and further grow and instill transparency in the industry.”
Zhao told Cointelegraph that the company has been in talks with CMC for a few months before closing the deal in April. While the acquisition is rumored to have cost Binance $400 million, Zhao said that the company cannot disclose the amount of the deal, as it is protected by a non-disclosure agreement.
CMC will operate independently
While the companies are going to work closely together, CMC will still continue to operate as an independent business entity, both Binance and CMC emphasized. Zhao stressed that the acquisition will not change CMC's independence from external stakeholders:
“Binance has no bearing on CoinMarketCap rankings. CoinMarketCap stays committed to providing the most accurate, timely and quality cryptocurrency data in the industry while benefiting from Binance’s expertise, resources and scale.”
However, CMC will immediately undergo some internal restructuring as part of the deal. Brandon Chez, CMC’s founder, will be stepping down as CEO and will be replaced by CoinMarketCap’s current chief strategy officer, Carylyne Chan, as interim CEO.
Apart from the reshuffle, CoinMarketCap will not see any changes in its team in the near future, or at least the next couple of months. Chan told Cointelegraph:
“Other than that, there won't be any other major team changes at CoinMarketCap. Everyone is going to stay on and everyone is really excited about what's happening. [...] I think that no other major changes that we see, definitely not in the next couple of months.”
CoinMarketCap to remain neutral regarding project listings
According to Chan, Binance did its best to ensure that CMC can continue to adhere to its own listing methodology. The interim CEO told Cointelegraph that the firm is not planning any sufficient listing changes anytime soon:
“We’ll stick to our listing requirements and make sure that everything is fair and unbiased to anyone who wants to list anything on CoinMarketCap. So that will be our firm commitment that [...] will not change following the acquisition.”
So, what does this acquisition really mean?
While CMC will continue to operate independently to ensure neutral and transparent data, Binance will be contributing significantly to CoinMarketCap’s further development and projects in 2020, Chan noted.
The exchange, which has at least 800 employees worldwide, is expected to share its expertise in a number of areas like finance and security. Chan highlighted that the acquisition will help CMC evolve:
“We are going to get a lot from Binance in terms of understanding how they're running a better team in terms of best practices. I think there are some really basic things around security, finance that we will learn from Binance just based on the fact that they have a way larger team than us and have scaled out much more efficiently.”
The CMC acquisition comes about six months after industry reports claimed that CoinMarketCap was “entirely bootstrapped” — i.e., continuing its operations with minimal financial resources. In October 2019, Chan reportedly said that CMC did not plan to raise any funds soon and was continuing “bootstrapping and scaling.”