the world’s largest cryptocurrency exchange by volume, is set to launch a regulated bank that will be owned by crypto investors. According to a statement released on July 12, 2018, the new bank will be named ‘Founders Bank’, and Binance has said that its stake in the venture is five percent.
Alongside other anchor investors, Binance will make its investment in the bank for a five percent stake offered at a pre-money valuation of $155 million. The statement also revealed that an equity token sale would take place on behalf of the bank under German financial regulations, in partnership with a major European stock exchange later in 2018.
Binance Expansion Strategy
This represents the latest in a series of bold expansion moves by the crypto-trading behemoth, which has recently launched a pioneer exchange service in Uganda and invested in a series of exciting blockchain development startups. According to CEO Changpeng Zhao, Binance is expected to achieve an operating profit of between $500 million and $1 billion in 2018 alone.
Alongside its partners in the new venture, Binance states that it expects to morph Founders Bank into the world’s first decentralized and community-owned bank, subject to receiving the necessary licenses and approvals. The bank plans to conduct an offering using the ICO platform Neufund. Following this, it will then issue what the statement describes as “legally binding equity tokens.”
It remains unclear what position financial regulators in Malta and Europe will make of the plan. To go ahead with the project, the startup must receive approval from Maltese monetary authorities and the European Central Bank (ECB).
Marc Ostwald, global strategist at ADM Investor Services International, summed up the mood surrounding the announcement.
Speaking to Bloomberg, he said