The largest cryptocurrency exchange in the world has just announced that it has concluded the acquisition process of a Californian crypto startup.
“Diamond In The Rough”
On Tuesday morning, Binance, a premier cryptocurrency platform, confirmed that it had completed the acquisition of Trust Wallet, a mobile-centric wallet solution.
— Binance (@binance) July 31, 2018
As per a Bloomberg report on the subject, Trust Wallet is a small U.S.-based startup, with ten employees. Since November 2017, the wallet provider has ramped up support for a range of crypto assets, with the service now facilitating the storage of upwards of 20,000 Ethereum-based tokens (ERC-20, ERC-721 etc.).
Along with a security option, the app supports an in-house decentralized-application browser, allowing users to interface with innovative smart contracts on the Ethereum network.
Like its name suggests, the wallet has proved itself to be a reliable method of storage for many cryptocurrency investors. Unlike a majority of its competitors, private keys are only held in the hands, or more accurately, the device of a user. This has proven to have been a great alternative in comparison with the traditional method, with confidential information staying far away from any company-operated servers.
All information the firm collects is a consumer’s public wallet addresses, vital contact information, and social media accounts, mitigating a majority of the risk of security breaches and a subsequent loss of funds.
Speaking on the appeal of the acquisition, the Malta-based exchange noted:
“The company has built a reputation for security and has held itself to the guiding principles that it will never access user wallets, hold private keys, and ask for personal information.”
Along with this statement, Changpeng Zhao, Binance’s fervent CEO, called it a “diamond in the rough,” which is a meaningful statement from such an influential industry leader.
At What Cost?
Zhao noted that the deal was not “highly priced,” as Trust Wallet isn’t currently home to a vast user base. But if Binance’s user statistics prove to be accurate, Trust Wallet may see an influx of interested users flocking to download the mobile application.
It is important to note that Trust Wallet will remain autonomous, as was agreed on in the deal, with Binance only working on the administrative and marketing facets of the firm. Zhao, better known as CZ in the crypto community, spoke more on Binance’s role in the operation of Trust, when he stated:
“They haven’t done much marketing which is where we can help. They are strong technically but don’t like doing marketing, HR etc… now merging with us they don’t have to worry about money.”
Trust Wallet & Binance, What Does This Mean Moving Forward?
TechCrunch reports that Trust Wallet’s founder will plan on adding support for more blockchains in the future, namely Bitcoin, EOS, and NEO. As well, it was stated that the startup’s executive team is eyeing an employee expansion, with the founder proposing to move from five to 10 developers.
On Binance’s end, this deal will be put to use in Binance Chain, the platform’s upcoming decentralized exchange, with Trust likely seeing integration as a native wallet. CZ said that the project is still in a development phase, but did not make TechCrunch privy to when the full release would arrive.
While the Trust Wallet buy-out marks Binance’s first stab at an acquisition deal, this will be far from their last. Zhao noted that his firm is in “early-stage talks” with other crypto startups, hoping to acquire other firms that may appeal to Binance’s goals and aspirations.
Binance raked in nearly $500 million in profit since the commencement of 2018, with preliminary figures showing that profits will eclipse the highly-coveted $1 billion mark come January 2019. So it makes sense why they have a substantial amount of liquid capital to spare for the acquisition of other firms.