Binance.US isn’t worried about the crypto crash

“We’re entering a crypto winter in a position of strength,” Binance.US CEO Brian Shroder told Protocol.

 Binance.US CEO Brian Shroder

Binance.US appears to be on a solid path under CEO Brian Shroder.

Photo: Binance

Brian Shroder had just been named Binance.US’s president last September when the crypto company offered to bump him up to CEO.

The sudden promotion marked a turbulent period for Binance.US leadership. Shroder replaced Brian Brooks, who stepped down as CEO just three months after taking the post, citing “differences over strategic direction.” Shroder took over from Catherine Coley, who was named CEO when Binance.US launched in 2019 and abruptly left last year.

Shroder called the leadership changes “a natural transition” for a growing startup “where something was created from scratch.”

“We’re transitioning from a one-product company to a professional organization launching multiple products and services on a very clear pathway to IPO,” he said.

Binance.US appears to be on a solid path under Shroder. Having just raised a $200 million seed round at a $4.5 billion valuation in April, Binance.US is set to announce more funding “in the next month or so” as an extension to that round, Shroder told Protocol. While other crypto companies are pulling back on expansion plans, he said the company is gearing up for more growth.

In an interview with Protocol, Shroder talked about how Binance.US is facing the new crypto winter, the challenges of leading a startup associated with a controversial crypto powerhouse and Binance.US’s own rocky history.

This interview was edited for brevity and clarity.

You had told Binance.US employees “to ignore the noise,” referring to the current market slump. Why did you feel it necessary to send that message?

The reason that I wanted to send it is I feel like there was a lot of stress and tension. A lot of that comes from watching your own portfolio, watching the broader crypto markets fall. That's not only just for crypto. That's for equities as well.

I wanted to basically set the tone that not only is everything fine for us, we're actually entering the crypto winter from a position of strength. In my mind, there is no world in which we emerge from crypto winter in a not stronger position given the things that we have done to enter fully resourced and growing.

Can you elaborate on that? What did you do to accomplish this position of strength?

It's a variety of things. Historically, we've been a pretty small platform where we kind of only had one product and service, which is primarily spot trading. We are a crypto platform where buyers meet sellers, and we take a fee.

Since I've taken over the role, and since we have now taken on external third-party capital, we are on a mission to grow. We are starting on our journey of launching multiple products and services over the next 12 to 18 months. In order to launch those products and services and maintain them and grow them, you require talented people.

From our point of view, the reason why we are entering the crypto winter in a position of strength is because we are well-resourced — completing our seed round in April raising over $200 million from a variety of different, extremely reputable investors — and then [started] to do what we promised, which is roll out products and services. It’s creating a momentum for us that is allowing us to grow, attract top talent and then, most importantly, deliver value to our customers.

Are you targeting employees that are getting laid off at other crypto companies?

We're open to all kinds of employees from different sectors, whether they had their offer canceled by Coinbase or they were laid off by Gemini or they're still at these companies. We are talking to all of those types of candidates, for sure.

Are there areas where you plan to proceed with caution or maybe even deemphasize given what's going on in the market?

We will view everything through a lens of ROI. We will only be doing things that make sense from an ROI point of view, which is not new. This is what we've been doing since Day One.

You know, there is a reason why there is no Binance Stadium. There is a reason why Coinbase spent more on a 30-second Super Bowl ad than we did in our entire marketing budget of 2021.

There's a reason why we are better-positioned going into this crypto winter than them: because we were very judicious with our own capital. We will be even more judicious with our investor capital. We will not invest in areas where there's no clear ROI.

Binance.US recently left the Blockchain Association. What was the reason for that move?

Being able to tell our own story in our own words is the most important thing that we can be doing. Because in the absence of you telling your own story, then anyone fills in the blank. Competitors fill it in with myths and bad sentiments and things like that.

To the extent that you're paying people to tell your own story, they might not get it precisely right, or they certainly might not be as passionate about that.

In D.C., we're taking an all-hands approach where we are diversifying the amount of resources that we use. We do employ a few lobbyists. We are going to be joining several trade organizations and being a part of the broader D.C. community. We will be building up our own team so we will be creating resources in D.C. and having people permanently based there to be able to go in and have these conversations in person.

In terms of telling your own story, the perception is still that Binance, the company you’re associated with, often has troubles with regulators and is grappling with allegations that it's being used for illicit activity. How are you dealing with those perceptions?

It's effectively an education campaign from our end. The average person and certainly the average person in D.C. sees the Binance.US brand name and equates it to the global brand name. So we have to go and educate them and inform them that we actually are a separate legal company, that this is not a parent-subsidiary relationship. We exist for the explicit purpose of being a regulated and licensed entity in the United States.

Our relationship with the entity is basically governed by a series of legal and licensing agreements. We have licensed the finance technology and Binance name. It is an education process in letting them know why we were originally set up and the relationship between the two entities.

Certainly the fact that we share the same brand name is very powerful and wonderful on the consumer side, because consumers — especially those who know crypto — are rabid fans of Binance. They know and love the brand and they appreciate it for what it stands for. We just have to do a better job in explaining that to the regulators and the policymakers. That is already underway, and we've had really good progress.

Frankly, it is quite helpful for us in the United States when the brand has a lot of the success that it's been having. Being able to get licensed in Dubai, being able to get licensed in Italy, being licensed in France, being licensed in a G7 country, just elevates the profile of the Binance brand and that obviously will have positive cycles and a positive halo effect to us here in the United States, even though it is a separate company.

The story of Binance.US itself has been rocky. You have had turnovers in leaderships with the sudden exits of Catherine Coley and Brian Brooks. How do you explain that to investors and clients?

Before I took this role, I was at Ant Financial, and I oversaw multiple portfolio companies — most of which are actually unicorns now — multiple billion-dollar organizations that have thousands of people under them. Turnover in the leadership team was not only expected, it was welcomed. Because what that means is that the organization is growing and evolving.

The reality is that [in] an organization — in terms of leadership that grows from zero, meaning getting it off the ground to a million [users] — it is never the same leadership team that takes the organization from 1 million to 10 million users. Typically, it's even a different leadership team that takes the organization from 10 million to 100 million.

I think that what you have experienced in Binance.US is effectively a natural transition where something was created from scratch. We were able to get a product out the door. Now we're going and transitioning from a one-product company to a professional organization launching multiple products and services on a very clear pathway to IPO.

My tenure as CEO has been focused on that last stage: getting the right people on the bus to be able to effectively go through the IPO process and take the company public.


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