Binance Acquires Trust Wallet in Push to Expand Crypto Services
Binance, the world’s biggest crypto exchange, announced on Tuesday that it has purchased Trust Wallet, a decentralized wallet service for digital tokens that also serves as a browser for so-called decentralized applications.
Trust Wallet is not a household name, even in the cryptocurrency world, but the deal is nonetheless significant. That’s because the Mountain View-based startup is Binance’s first acquisition, and points to the future ambitions of a company that emerged from nowhere in 2017 to be an industry leader that reportedly posted profits of between $500 million and a billion last year alone.
In an interview with Fortune, CEO Zhao Changpeng said he admired the Trust Wallet team’s engineering skills, and that the acquisition offers a way for Binance to offer its customers a decentralized way to store their cryptocurrency.
Currently, Binance customers rely on the company to act as a custodian of sorts. By contrast, a decentralized wallet lets customers hold the cryptocurrency directly using their own “private keys.” (While many Binance customers already transfer their funds to an external wallet, the acquisition gives Binance a wallet brand of its own).
Zhao, who goes by CZ, wouldn’t disclose how much Binance paid for Trust Wallet but only said the deal amounted to excellent value. He also said Trust Wallet would continue to operate as its own brand and that Binance would let the team operate with considerable independence.
Trust Wallet Founder Viktor Radchenko said he looked forward to collaborating with Binance.
“This is an incredible opportunity for Trust Wallet to work with the biggest and the most respected exchange in the world, but we also feel as though we are aligning with a partner that shares a similar approach towards security and user management,” said Radchenko in a statement.
Trust Wallet allows users to hold the digital currency Ethereum, and over 20,000 other digital tokens that are built using Ethereum’s coding standards.
Intriguingly, Trust Wallet also doubles as a browser for decentralized web applications (“dApps”), which some people describe as “Web 3.0.” Instead of being controlled by the servers of a single company like Facebook or Google, the applications—which included everything from games to computer storage—are instead run across multiple computers and have no centralized authority.
In a profile of the company, the website CryptoBit Games wrote, “[U]sers can search, discover, and use their favorite dApps (like CryptoKitties) right from Trust Wallet. It’s a dApp inside a mobile app.”
Binance’s CZ told Fortune he believes decentralized applications are still in their early stages but will be a big part of the future.
CZ also said Binance is in advanced stages of acquiring several other companies, and that it is prospecting for more acquisitions.
The purchase of Trust Wallet comes after a whirlwind year for Binance, which Bloomberg assigned a conservative $3 billion valuation in April. In that time, the company became the world’s biggest exchange, and also got into a legal showdown with Sequoia Capital, while reportedly accusing the high-profile venture capital firm of undervaluing it. (Binance has since stated the lawsuit did not relate to valuation and claimed it has not made such accusations).
Binance has also set its sights on building out a banking and blockchain empire from Malta, viewing the tiny Mediterranean nation as a favorable place for fin-tech companies.
This story has been updated to include a comment from Binance about the Sequoia litigation.
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