Fintech

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 Binance.com 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 Binance.com 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 Binance.com 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.

Entertainment

Niantic’s future hinges on mapping the metaverse

The maker of Pokémon Go is hoping the metaverse will deliver its next big break.

Niantic's new standalone messaging and social app, Campfire, is a way to get players organizing and meeting up in the real world. It launches today for select Pokémon Go players.

Image: Niantic

Pokémon Go sent Niantic to the moon. But now the San Francisco-based augmented reality developer has returned to earth, and it’s been trying to chart its way back to the stars ever since. The company yesterday announced layoffs of about 8% of its workforce (about 85 to 90 people) and canceled four projects, Bloomberg reported, signaling another disappointment for the studio that still generates about $1 billion in revenue per year from Pokémon Go.

Finding its next big hit has been Niantic’s priority for years, and the company has been coming up short. For much of the past year or so, Niantic has turned its attention to the metaverse, with hopes that its location-based mobile games, AR tech and company philosophy around fostering physical connection and outdoor exploration can help it build what it now calls the “real world metaverse.”

Keep Reading Show less
Nick Statt

Nick Statt is Protocol's video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at nstatt@protocol.com.

Every day, millions of us press the “order” button on our favorite coffee store's mobile application: Our chosen brew will be on the counter when we arrive. It’s a personalized, seamless experience that we have all come to expect. What we don’t know is what’s happening behind the scenes. The mobile application is sourcing data from a database that stores information about each customer and what their favorite coffee drinks are. It is also leveraging event-streaming data in real time to ensure the ingredients for your personal coffee are in supply at your local store.

Applications like this power our daily lives, and if they can’t access massive amounts of data stored in a database as well as stream data “in motion” instantaneously, you — and millions of customers — won’t have these in-the-moment experiences.

Keep Reading Show less
Jennifer Goforth Gregory
Jennifer Goforth Gregory has worked in the B2B technology industry for over 20 years. As a freelance writer she writes for top technology brands, including IBM, HPE, Adobe, AT&T, Verizon, Epson, Oracle, Intel and Square. She specializes in a wide range of technology, such as AI, IoT, cloud, cybersecurity, and CX. Jennifer also wrote a bestselling book The Freelance Content Marketing Writer to help other writers launch a high earning freelance business.
Climate

Supreme Court takes a sledgehammer to greenhouse gas regulations

The court ruled 6-3 that the EPA cannot use the Clean Air Act to regulate power plant greenhouse gas emissions. That leaves a patchwork of policies from states, utilities and, increasingly, tech companies to pick up the slack.

The Supreme Court struck a major blow to the federal government's ability to regulate greenhouse gases.

Eric Lee/Bloomberg via Getty Images

Striking down the right to abortion may be the Supreme Court's highest-profile decision this term. But on Thursday, the court handed down an equally massive verdict on the federal government's ability to regulate greenhouse gas emissions. In the case of West Virginia v. EPA, the court decided that the agency has no ability to regulate greenhouse gas pollution under the Clean Air Act. Weakening the federal government's powers leaves a patchwork of states, utilities and, increasingly, tech companies to pick up the slack in reducing carbon pollution.

Keep Reading Show less
Brian Kahn

Brian ( @blkahn) is Protocol's climate editor. Previously, he was the managing editor and founding senior writer at Earther, Gizmodo's climate site, where he covered everything from the weather to Big Oil's influence on politics. He also reported for Climate Central and the Wall Street Journal. In the even more distant past, he led sleigh rides to visit a herd of 7,000 elk and boat tours on the deepest lake in the U.S.

Fintech

Can crypto regulate itself? The Lummis-Gillibrand bill hopes so.

Creating the equivalent of the stock markets’ FINRA for crypto is the ideal, but experts doubt that it will be easy.

The idea of creating a government-sanctioned private regulatory association has been drawing more attention in the debate over how to rein in a fast-growing industry whose technological quirks have baffled policymakers.

Illustration: Christopher T. Fong/Protocol

Regulating crypto is complicated. That’s why Sens. Cynthia Lummis and Kirsten Gillibrand want to explore the creation of a private sector group to help federal regulators do their job.

The bipartisan bill introduced by Lummis and Gillibrand would require the CFTC and the SEC to work with the crypto industry to look into setting up a self-regulatory organization to “facilitate innovative, efficient and orderly markets for digital assets.”

Keep Reading Show less
Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Google Voice at (925) 307-9342.

Enterprise

Alperovitch: Cybersecurity defenders can’t be on high alert every day

With the continued threat of Russian cyber escalation, cybersecurity and geopolitics expert Dmitri Alperovitch says it’s not ideal for the U.S. to oscillate between moments of high alert and lesser states of cyber readiness.

Dmitri Alperovitch (the co-founder and former CTO of CrowdStrike) speaks at RSA Conference 2022.

Photo: RSA Conference

When it comes to cybersecurity vigilance, Dmitri Alperovitch wants to see more focus on resiliency of IT systems — and less on doing "surges" around particular dates or events.

For instance, whatever Russia is doing at the moment.

Keep Reading Show less
Kyle Alspach

Kyle Alspach ( @KyleAlspach) is a senior reporter at Protocol, focused on cybersecurity. He has covered the tech industry since 2010 for outlets including VentureBeat, CRN and the Boston Globe. He lives in Portland, Oregon, and can be reached at kalspach@protocol.com.

Latest Stories
Bulletins