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Binance is training good structural hygiene – and we’re all for it!
What does that imply precisely? ‘Binance Labs’ is now formally a separate entity to ‘Binance Group.’
Sounds kinda ‘meh’ – proper? However right here’s the factor…
By making Binance’s enterprise capital funding arm (Binance Labs) a totally separate entity to Binance Group (which incorporates their trade and different merchandise/companies) if one thing goes unsuitable with one, it shouldn’t impression the opposite.
To clarify what we’re speaking about, we’ll use the instance of FTX and Alameda Analysis.
ICYMI, FTX (the trade) and Alameda Analysis (the funding arm) had been separate entities, however, Alameda borrowed from FTX so as to make its investments.
(The waters had been muddy at greatest).
And people borrowed funds didn’t come from FTX as a lot as they did FTX’s clients.
So, two massive issues right here…
First off, this transformation appears to have occurred a while since Richard Teng took over as Binance’s CEO in November of final 12 months.
That change was all within the spirit of steering in the direction of better regulatory compliance and that is the primary massive transfer we’ve seen to assist obtain that.
Secondly, by making these entities fully separate (check out the disclaimer within the footer), it reduces the chance of the success or failure of 1 to the opposite.
Bravo, Mr. Teng.