Binance Launches a $1B Fund

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Binance, the world’s largest crypto exchange, plans $1 billion investment fund

What's the Story?

  • Binance is launching a $1B fund
  • The fund is denominated in BNB token
  • It'll be backing both funds and companies

Why Does This Matter?

Binance is joining the fray of cryptocurrency companies that are starting venture funds. The fund isn't that much of a surprise. Binance has already invested in companies with it's Labs division and is now just formalizing the process. I was surprised that Binance is going to become an LP in funds. For fund managers, Binance would make an excellent LP because you'll have access to trading data and what tokens will be getting listed. I don't know how this will work from a regulatory perspective, but Binance is probably the best LP a fund could want. There isn't really much to discuss about the fund until it launches. I'll be watching with a lot of interest on how they invest and how they leverage their status in the ecosystem with their investments.


Goldman-Backed Crypto Exchange Rattles Users With Terms Change

What's the Story?

  • Poloniex suspended cryptocurrency accounts for existing clients
  • Existing clients must provide documentation to prove their identity
  • Poloniex is doing this to align with registered money service laws

Why Does This Matter?

If you don't control your private keys, you don't own the cryptocurrency. It's just an IOU. While I think what Poloniex did is abhorrent, this shouldn't surprise people. People shouldn't leave their cryptocurrency on exchanges. The value in cryptocurrency is derived from owning your private keys. You have an asset that can't be arbitrarily taken by state actors or hacked. You are your own bank. The one positive side of this story is that Poloniex, which in the past had a shady past, is getting its act together. If the ecosystem has many "legitimate" exchanges to choose from then, it's only a positive. Poloniex should provide healthy competition to Bittrex, Gemini, and Coinbase in the United States. We are reaching an exciting intersection in cryptocurrency. In my opinion, Bitcoin's has value because it can't be seized. However, most holders leave their cryptocurrency in exchanges which defeats the purpose that creates its value. But realistically, Bitcoin or another cryptocurrency can only reach mass market adoption if people have easy ways to hold it and that involves tradeoffs like keeping your Bitcoin on an exchange. Interesting times ahead.