The chief executive of major cryptocurrency exchange Binance, Changpeng Zhao — often known as CZ — has revealed that the firm diverts a quarter of its profits into investment opportunities.
Zhao’s comments follow Binance’s completion of several recent high-profile acquisitions — including crypto data site CoinMarketCap and Indian crypto exchange WazirX.
In a recent interview with South China Morning Post, Zhao estimated that Binance reinvests roughly 25% of its annual profits into expansions and acquisitions.
“We usually spend about a quarter of our profit on investment opportunities every year," Zhao said, emphasizing that Binance is currently looking to grow its portfolio of businesses “beyond just trading.”
With Binance estimated to have netted roughly $550 million in profits during 2019, the exchange is likely investing in excess of nine-figures annually.
Binance secures high-profile acquisitions
The exchange has aggressively expanded its fiat gateways in recent months, currently supporting crypto purchases with credit cards in over 50 jurisdictions.
Zhao stated that Binance is “interested in exchanges that have existing banking relationships, which enable them to accept trading in local fiat currencies.”
In November, Binance acquired Indian cryptocurrency exchange WazirX to launch a fiat gateway for cryptocurrency purchases in Indian rupees. The decision turned out to be well-timed, with India’s Supreme Court repealing a ban on banks providing financial services to crypto businesses several months later.
At the start of April, Binance also acquired the popular market data provider and long-term crypto mainstay CoinMarketCap for $400 million.
Binance rivals Bitmex for top derivatives exchange by volume
In addition to fiat gateways, Binance has also introduced a 125x futures platform.
Despite volume collapsing during the March 12–13 crash on Binance’s futures exchange, open interest has since recovered to the platform’s pre-crash levels.
Open interest for Binance futures. Source: Skew
Although Binance is a relative newcomer to the derivatives sector, the exchange has quickly captured significant market share — vying with BitMex for the title of the top platform by volume.