(Bloomberg) — Even before the U.S. government demanded that Binance Holdings pay a $4.3 billion fine and charged founder Changpeng “CZ” Chao with various crimes, the cryptocurrency exchange became a global faced significant regulatory challenges.
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Australia has revoked Binance’s derivatives business license and raided several of the company’s offices in Australia. Singapore ordered the company to cease operations in the city-state. Hong Kong warned more than two years ago that Binance was an unregulated platform. Even Dubai, where CZ is primarily based, has not yet granted full license to the exchange.
Read: Binance’s lead in offshore market declines as rivals gain ground
But beyond the beleaguered exchange business, another corner of CZ’s extensive portfolio of crypto companies owns He said he sees growth and business opportunities in the UAE.
Trust Wallet is a software-based crypto wallet service designed to allow users to self-custody the types of digital assets popular in decentralized finance applications. CZ acquired a majority stake in the company that operates Trust Wallet in 2018. Éowyn Chen, who will serve as the current CEO from 2022, previously served as Binance’s vice president of marketing.
“I want to make Asia a top priority for growth,” Chen, 33, told Bloomberg News in an interview on the sidelines of a crypto conference in Australia last month.
Chen cited Southeast Asian countries such as Vietnam, the Philippines and Indonesia as markets to expand the platform. “I imagine the average revenue per user for these locations will be lower, but the total amount could potentially be very interesting as well,” she said.
According to Data.ai, the app-based service has been downloaded 56 million times on iOS and Android worldwide, making it the most popular cryptocurrency wallet for handheld devices. In second place is Rival MetaMask with 43 million downloads. According to Data.ai, Trust Wallet had about 8.5 million downloads in India, followed by MetaMask with about 3.5 million downloads in Pakistan.
Despite recognizing growth potential in Asia, the company is moving operations to the United Arab Emirates.
Although Chen himself moved to Dubai from Virginia in October, the company will be based in Ras Al Khaimah, the UAE’s sixth largest city. The company has about 80 employees around the world, of which about 15% to 20% are in the UAE, Chen said.
Read: Emirates touts itself as next haven for billionaires
“Regulatory uncertainty in the U.S. is a challenge,” Chen said. “We are therefore diversifying our risk management from a corporate perspective by establishing a UAE entity.”
Chen said UAE regulators have a “more friendly outlook towards cryptocurrencies in general.” For this reason, Trust Wallet is confident in the possibility of “reasonable regulation of decentralized finance,” Chen said.
Chen said Trust Wallet operates in the Ras Al Khaimah Free Trade Zone, where it has a business license. This zone is also known as his RAK DAO, meaning “Digital Asset Oasis”, and primarily caters to blockchain companies.
RAK offers “more flexibility and better corporate treatment” for Web3 companies, he said in explaining his reasons for locating there. RAK DAO officials declined to comment.
Chen said a separate company, DApps Platform, holds the intellectual property rights to the wallet service and is based in the Abu Dhabi Global Market, another free trade zone in the UAE.
Trust Wallet is not yet profitable and only started generating revenue last year, Chen said.
CZ and Trust Wallet
Mr. CZ has no role in Trust Wallet’s day-to-day operations, but as the company’s majority owner, he provides “strategic operational advice.” “It’s bringing a lot of spotlight and exposure,” Chen said when CZ talks about Trust Wallet.
Trust Wallet’s native token TWT soared about 50% in a single day last November after CZ promoted the app on X shortly after the collapse of Sam Bankman Fried’s FTX cryptocurrency exchange. It became $2.48. It was trading at around $1.11 in Singapore as of 2:15 pm on Friday, according to data from CoinGecko.
“We don’t have much of a marketing budget. We probably only spend a few thousand dollars a month on marketing,” Chen said. “A lot of our growth has happened organically or through word-of-mouth promotion,” she said.
CZ resigned as CEO of Binance following a settlement with US prosecutors, and was replaced by Richard Teng. CZ also relinquished his role as chairman of Binance’s U.S. exchange, but retained financial interests in the embattled platform.
Binance recently launched a similar branded cryptocurrency wallet that appears to compete directly with the Trust Wallet platform, but it remains to be seen whether Teng will seek to aggressively expand Binance products.
Read: Binance’s new CEO Teng’s first task is to avoid customer loss (3)
–With assistance from Ben Bartenstein.
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