Binance has announced that it will donate coin listing fees to charity. And while this announcement comes seemingly out of the blue, the decision is not without precedent. More than four years ago, members of the Binance team described future blockchain systems to increase charitable transparency. As an extension of this project, and as a way to attract new business, Binance’s announcement couldn’t have come at a better time.
The Optics of the Binance Charity Announcement
Binance is a giant in crypto (see Binance exchange review), but it’s a giant nonetheless diminished by the ongoing bear market. In recent public statements, CEO Changpeng Zhao told the world that crypto bulls would be back in October and November. And while 2017-level trading volumes have not yet materialized, those who buy Bitcoin today are enjoying prices that are more stable than those at any other time during the past three years.
While giving to charity for the “greater good” is laudable, everyone knows that Binance is a business in search of revenue. The Hong Kong exchange has suffered bad press in recent days, after Expanse shared screenshots of Binance’s apparently extortive attempts to take 400 BTC in listing fees for a single new coin.
Zhao claims these events are entirely fabricated, and that Binance’s decision to list a new coin is based solely on merit, not the project’s ability to pay. The move to donate such listing fees to charity comes closely on the heels of this minor scandal.
Zhao’s pronouncement is not very specific – what charities will be chosen? Will all or only a portion of listing fees be given away? But the decision is set to accompany a publication of all Binance listing fees, as a way of making this process more transparent. Zhao and company don’t want there to be any credible appearance of shakedown practices when dealing with new listings.
What Will This News Mean for the Markets?
Cryptocurrency trading volumes are still anaemic when compared to those of one year ago. And yet, Binance 24 cryptocurrency trading volume still frequently approaches $1 Billion. No matter how much the exchange giant gives away, Binance grew quickly and has already made a lot of money. By increasing public engagement, connecting to charitable causes, and maybe even improving the way charities distribute funds, Binance is helping to solidify its place in a vulnerable market climate.
Despite low cryptocurrency prices, blockchain news has been almost uniformly good in 2018. Major partnerships from Ripple, increased vendor adoption of Bitcoin, friendly attention from global regulators – no one knows what news item might tip the scales, catalysing a new bull run. Binance’s announcement is another attempt to give investors every reason to trust the markets again. Sooner or later, a strategy like this is likely to work.