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Binance is working towards 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 very separate entity to Binance Group (which incorporates their trade and different merchandise/providers) if one thing goes improper with one, it shouldn’t affect the opposite.
To elucidate 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) have been separate entities, however, Alameda borrowed from FTX so as to make its investments.
(The waters have been muddy at greatest).
And people borrowed funds didn’t come from FTX as a lot as they did FTX’s prospects.
So, two large issues right here…
First off, this variation appears to have occurred a while since Richard Teng took over as Binance’s CEO in November of final yr.
That change was all within the spirit of steering in the direction of higher regulatory compliance and that is the primary large transfer we’ve seen to assist obtain that.
Secondly, by making these entities totally separate (take a look at the disclaimer within the footer), it reduces the danger of the success or failure of 1 to the opposite.
Bravo, Mr. Teng.
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