TL; DR
Full story
Binance practices good structural hygiene – and we’re all for it!
What exactly does that mean? ‘Binance Labs’ is now officially a separate entity from ‘Binance Group.’
Sounds a bit ‘meh’, right? But here’s the thing…
By making Binance’s venture capital investment arm (Binance Labs) a completely separate entity from the Binance Group (which also includes their exchange and other products/services) if something goes wrong with one, it can should not have to influence the other.
To explain what we are talking about, we will use the example of FTX and Alameda Research.
ICYMI, FTX (the exchange) and Alameda Research (the investment arm) were separate entities, but Alameda borrowed from FTX to make its investments.
(The waters were muddy at best).
And those borrowed funds did not come from FTX as much as from FTX’s customers.
So two big things here…
Firstly, this change appears to have taken place some time since Richard Teng took over as CEO of Binance in November last year.
That change was entirely in the spirit of driving greater regulatory compliance and this is the first major step we’ve seen to help achieve that.
Second, by making these entities completely separate (view the disclaimer in the footer), this reduces the risk of success or failure from one to the other.
Bravo, Mr. Teng.