Behind Binance's 20+ news announcements in H2 2019 lies a deep ambition to regain lost markets and snatch a new one

Binance has kept the cryptocurrency industry on its toes with a flurry of announcements this year. 

Based on rough math, the cryptocurrency exchange has made more than 20 announcements of new offerings and strategic developments during the second half of the year, making a headline almost every 10 days. 

As Binance extends its footprint across different regions and business lines, The Block reviewed some major Binance news since June to unearth the strategy underpinning its significant new offerings. 

At the heart of Binance’s H2 2019 announcement spree are three key areas of focus for the firm: a homecoming to China, a push into the U.S. market, and a foray into cryptocurrency derivatives. Since June, Binance has launched a U.S. focused exchange that strives to meet stringent compliance requirements, several new onramp options for its Chinese users, and a derivatives platform that is set to offer futures and options. The exchange is diversifying its bets both geographically and in terms of product offerings. 

The beginning of June was permeated by agitation as Binance announced it would block U.S. users due to compliance concerns. However, in July, the exchange assured the public that it would soon launch Binance.US, an exchange operated independently from Binance. After officially openinng trading on Sept. 23, the exchange has aimed to bolster Binance's U.S. presence in a regulated way. 

According to SimilarWeb data, U.S. visitors accounted for 14% of Binance’s website visit in May, prior to the U.S. ban - a lucrative piece of the exchange pie that the firm clearly did not want to give up. However, as previously noted by The Block, there is still a long way to go before Binance.US becomes the full-fledged, regulated exchange like its U.S. competitors such as Coinbase.

For one, Binance.US needs to acquire both the federal level Money Services Business (MSB) license and the money transmitter licenses from most U.S. states, including the coveted BitLicense from the New York State Department of Financial Services  The exchange’s listing of its native token BNB could also be of legal concern. In the past, people have questioned whether BNB is security, as BNB token burns are tied to Binance's profits and other operating metrics. 

As for the exchange's attempt to re-capture the Chinese market, last month Binance hosted a media gathering in Shanghai, marking its first high profile public appearance in China in two years. At the time, Binance’s co-founder and CMO Yi He also posted on WeChat that Binance is shifting its focus back to the Chinese market and “trying to open up fiat to crypto onramp channels.” 

In the post, He welcomed “old friends” to partner with Binance. The exchange was originally founded in China but has been in exile for the past two years after the Chinese government's clamp-down on cryptocurrency trading in 2017. At that time, Binance claimed that only 19% of its users are based in China, implying its expulsion from China would not impact its business significantly. 

Since then, however, Binance's positioning has changed. Over the past few months, Binance has invested in Chinese blockchain media startup Mars Finance and launched a P2P trading channel where users may utillize Alipay and WeChat to buy cryptocurrencies. Under the surface, the exchange has also quietly allowed Chinese users to participate in several initial exchange offering (IEO) projects on Binance LaunchPad. 

To other exchanges with deep roots in China, Binance’s homecoming is nothing but bad news. Huobi and OKEx run their own OTC desks that have been steadily bringing them Chinese retail users. The head of marketing at Huobi Ross Zhang recently noted this increased competition, saying:

"Huobi OTC has an advantage in user experience, liquidity, security, risk control, anti-money-laundering, and user protection measures. We will continue to focus on developing those areas to provide the optimal OTC product and experience for our users." 

Cryptocurrency exchanges are not the only businesses agitated by Binance's high profile re-entry int0 the Chinese market. AliPay and WeChat were recently forced to take an odd stance with Binance as the firm's CEO Changpeng Zhao confirmed that they accept the two payment methods for exchanging fiat into cryptocurrencies. It is a known secret that Chinese investors have been using the two firms' payment venues for cryptocurrency OTC transactions. However, on the surface, the two firms forbade any cryptocurrency-related transactions and said that they would suspend payment services for accounts engaging in such activities. 

Since WeChat and AliPay dominate the Chinese online payments market, the fact that they have downplayed the legality of P2P cryptocurrency trading on Binance may present a major hurdle as the company emphasizes its homecoming. 

Finally, Binance does not seem to be satisfied with just being the most popular spot crypto exchange. With the emphasis on its derivatives platform, it is going after the likes of BitMEX, which made its name with the invention of bitcoin perpetual swaps. Binance is making a significant bet that its large customer base will support its global ambition to dominate not only in the spot exchange market but also in the U.S., China, and the crypto derivatives market. 

"Given the huge existing customer base on spot and margin trading, it will be relatively much easier for Binance to build initial liquidity than other competitors, which is the most difficult part of starting up an exchange," market maker Altonomy co-founder Ricky Li told The Block in a previous interview.