Binance, the world’s largest cryptocurrency exchange by market volume, has acquired CoinMarketCap, a popular crypto data site. Though the amount was not officially unveiled, unnamed sources told The Block before the deal was made public that the crypto exchange was looking to pay as much as US$400 million for CoinMarketCap.
Binance CEO Changpeng Zhao told CoinDesk the deal closed March 31, 2020, though a verbal agreement was reached “a few months ago.” He declined to give an actual figure, citing non-disclosure agreements, but did say it was Binance’s biggest acquisition to date.
As part of the transition, CoinMarketCap founder Brandon Chez has stepped down as CEO but will remain as an advisor. CoinMarketCap’s current chief strategy officer Carylyne Chan has been named interim CEO.
Traffic and data
Founded in 2013 in Delaware, CoinMarketCap claims it is the most-trafficked website for crypto and exchange information and rankings, and one of the most-cited sources for prices and exchange trading volumes.
Alexa ranks CoinMarketCap as the 556th most visited website globally in the last 90 days, way ahead of Coinbase at 1,549, Binance at 1,661, and competing crypto data provider CoinGecko at 7,397.
People familiar with the deal told The Block that CoinMarketCap’s ability to drive a significant amount of traffic was one of the main reasons for the acquisition. But the deal could also give Binance access to a mine of data from competitors, experts and industry participants pointed out.
Alexei Andryunin, head of token and exchange promotion service Gotbit, told CoinDesk that the purchase will provide Binance with “data on all their competitors, plus some of the best expertise for traffic generation in the crypto industry.”
For Clay Collins, founder and CEO of Nomics, with CoinMarketCap under the same roof as Binance, there’s a change that trust between the data provider and exchanges will be eroded.
“That data is now being given to a competitor with surveillance abilities,” Collins told CoinDesk. “It’s unlikely that other exchanges will want to see Binance aggregating and monetizing their own data.”
Additionally, despite the two companies having pledged to keep CoinMarketCap independent and neutral, there is a clear conflict of interest which has gotten industry players worried.
Andy Cheung, former chief operating officer at OKEx and founder of crypto derivative platform ACDX, told CoinDesk the acquisition “is not very good for the industry,” pointing to Binance’s own token BNB as an example.
“I can understand the business or potential profit,” he said. “But honestly, how are you going to convince people that the rankings and volume are true when you’re operating an exchange and also probably the biggest holder of BNB?”
Both Binance and CoinMarketCap have said that the crypto data platform will “maintain a strict policy of independence” from Binance and will continue to be run as an independent business entity.
Moving forward, CoinMarketCap said it plans to expand its information offerings to include trading products such as futures, options, lending and more value-added data analytics and tools.
Acquisition spree
Binance has been on an acquisition spree. Last year, it acquired nine companies, though only a few were announced publicly. These include Beijing-based blockchain data startup DappReview, Indian cryptocurrency exchange WazirX, and Seychelles-registered crypto derivatives platform JEX.
The company is now preparing to launch a new South Korean exchange after forming a local entity in October 2019 and acquiring BxB, the South Korean startup behind the world’s first KRW-backed stablecoin.
In 2020, Binance plans to add support for additional fiat currencies and stablecoins on its trading platforms, and at least one other acquisition deal is expected to close. There are also plans to launch a crypto debit card.
