Master of puppets or Who stands behind Binance

A Reddit user suggested three big cryptoexchanges Poloniex, Bittrex, and Binance might have one owner, who could have established them for creating frequent arbitrage opportunities and making more money.

Apart from traditional, many cryptoexchanges hide their managing board, server location, and office address (if any). This is being done in order to not to fall under the jurisdiction of one or the other state and to avoid tax and legal issues. It’s easier to get vanished if it gets too hot either. So, this one master of puppets version may seem pretty viable.

Let’s take a look at Binance, one of the biggest cryptoexchanges. There’s no info about their shareholders, management or the organizational structure on their website. It is well‐known that Binance has been founded by the Chinese‐Canadian engineer Changpeng Zhao.

According to Craft​.io, there are another 2 top managers behind Binance. These are He Yi, who is a co‐founder of the cryptoexhange and had worked with Zhao in another project OKCoin, and Ted Lin, an international markets expert.

First Zhao’s legal entity behind Binance was reportedly established in Shanghai, which was forced to move to Hong Kong after the cryptocurrency trade ban in mainland China. Some sources claim it was Beiji Technology but it is hard to find any sufficient info on that.

There was another Hong Kong based company called Binance (Hong Kong) Limited with the share capital of 1 HK Dollar (1,27 US Dollar). However, it was deregistered, i.e. cancelled its operation in the past spring. This entity have been owned by Binance Holdings Limited, established in the Cayman Islands.

As for Binance Holdings, the only other thing known about it, besides is jurisdiction, is that it owns binance​.co domain name. It’s interesting, that in the Whois Administrative Contact Information this company is located in the province of Zhejiang in China.

Recently, Binance has set up a bank account in Malta to be able to offer fiat‐to‐crypto deposits and withdrawals for their customers. Therefore, 2 legal entities have been registered in the Maltese town of Birkirkara, which are Binance Europe Services Limited and Binance Marketing Services Limited.

It’s really hard to understand whether Changpeng Zhao is a sole proprietor of Binance or someone else stands behind him.

Anyway, the connection among Biannce, Poloniex, and Bittrex looks quite speculative at the moment. That Reddit user, who claimed that, noticed one particular address is constantly sending to the Bitfinex wallet, and among several addresses that are sending to this address, each of those three exchanges send to that address and only those 3 exchanges, it seems. He says, those 3 exchanges seem to have the same «deposit address» on Bitfinex. Based on that, he concluded, that some big cryptotycoon could have created several exchanges, rather than a single big one, for making frequent arbitrage opportunities. This could be done to make advantage before ordinary cryptoexchange clients.

So, it’s nearly impossible to prove affiliation among those cryptoexchanges. Nonetheless, next time let’s study Poloniex and Brittex and see what happens.