It has never had a formal headquarters. Binance was founded in China, banished to Japan and self-exiled to Malta, whose financial regulator later denied having oversight of the exchange. While the firm has a major presence in Singapore, it was dealt a setback last month when its local unit withdrew an application to run an exchange in the city-state.
Now Binance is trying to settle on a location, Zhao said during the November interview, adding that an announcement about the headquarters would be coming “in a very short period.”
That’s an about-face from 2020, when Zhao said that the company’s headquarters was wherever he happened to be. In legal filings, the firm’s lawyers have said that it’s incorporated in the Cayman Islands, which is well-known for being an offshore tax and regulatory haven.
Binance’s ability to operate just about anywhere has made it difficult for regulators to establish jurisdiction over the company.
“Their approach was, ‘We don’t need a regulator, we are decentralized,’” said Brendler, the DA Davidson analyst. “That worked really well for growing and scaling and product innovations.”
Zhao’s freewheeling approach may need to change as Binance seeks to raise money from outside investors, who typically want some measure of government oversight as an assurance that a business is legally sound. Zhao is driven to find a supportive regulatory regime, according to people familiar with his discussions in the UAE.
Binance has been filling senior posts with former employees of UAE regulators, and it signed an agreement with the Dubai World Trade Centre authority to help craft a crypto regulatory framework.
Not all of Binance’s efforts to ingratiate itself to regulators have gone smoothly.
Last year, Binance.US, a separately managed trading operation associated with the exchange, hired a former U.S. acting comptroller of the currency as CEO. His appointment was seen as a positive step toward addressing regulatory concerns, but he lasted just three months, departing in August after citing differences over strategic direction.
Despite its legal challenges, investors may be tempted to take a chance on the world’s most successful crypto exchange. Late last year, Binance was seeking to raise money from sovereign wealth funds, and its U.S. affiliate was also pursuing investors with the goal of an initial public offering. In November, the Wall Street Journal reported that former executives estimated the company could be worth as much as $300 billion.
“To raise capital, we believe that the company needs to show a path to settling on a global headquarters and consolidating operations,” said Robert Le, an analyst for Pitchbook.
If Binance pulls it off, it could make Zhao even richer than Elon Musk, currently the world’s wealthiest person, and No. 2 Jeff Bezos, whom Zhao said he admires.
“I don’t know him personally,” Zhao, speaking at the November Bloomberg event, said of the Amazon.com Inc. founder. “But I would love to be associated with him in the future.”
—With assistance from Tom Schoenberg, Benjamin Bain and Erik Schatzker.
This article was provided by Bloomberg News.