In a recent statement, CommEx, which has just taken over Binance’s Russian unit, clarified that while it isn’t a subsidiary of Binance, some of its key team members were formerly associated with the exchange.
Through an open letter released on Friday, CommEx emphasized its status as an autonomous entity distinct from Binance, even though it chose not to reveal its ultimate beneficial owner (UBO).
The letter stated, “We wish to underline that, despite not disclosing our UBO, Binance does not own us.”
“We pride ourselves on being a dynamic and proficient startup, composed of passionate professionals from varied fields. A few key figures within our team once played pivotal roles at Binance, contributing their extensive expertise in cryptocurrency and digital technology.”
CommEx went on to state that over the last half-year, they’ve been intensely focusing on refining their platform. During this period, they’ve incorporated several former Binance team members into their fold.
Such incorporations have naturally led to a sharing of insights and experiences between CommEx and Binance, even if there’s no direct ownership link between the two companies.
CommEx Incorporates Binance’s Design
Beyond bringing onboard former Binance staff, CommEx has also adopted specific features, including design aspects, application programming interfaces (APIs), and usage terms reminiscent of Binance.
“While our present offering might appear foundational, our technical and product divisions are committed to advancing and delivering the premier user experience in the industry,” stated the exchange.
Changpeng Zhao, the CEO of Binance, had earlier acknowledged this. He further highlighted that, as per their agreement, CommEx does not cater to clientele from the United States and Europe.
“Incorporating features like the design and APIs similar to Binance was intentional, aiming to guarantee a seamless user experience,” mentioned CZ in a post on platform X last Thursday.
Yet, the undisclosed details about CommEx’s proprietors, combined with the involvement of previous Binance team members and the noticeable resemblances in website layout and APIs, have fueled rumors about Binance’s covert proprietorship of the entity.
Adam Cochran, a partner at venture capital enterprise Cinneamhain Ventures, even ventured to suggest that CommEx could be “a mere proxy set up by Binance.”
Binance Loses Market Share Amid Regulatory Pressure
Recent data suggests a notable decline in Binance’s market share when compared to other non-dollar cryptocurrency exchanges.
Among a cohort of exchanges, which encompasses prominent Asian entities like Upbit, Huobi, Bybit, and OKX, Binance’s market stake plunged to 54% in August. Forecasts indicate this figure might further recede to below 51% come September.
It’s significant to note that Binance held a dominant 75% share amongst these exchanges as 2022 wrapped up.
The contraction in Binance’s market presence is predominantly linked to intensifying regulatory scrutiny it faces.
In June, the SEC took legal action against Binance and its CEO, accusing them of a “clear violation of federal securities regulations.” The SEC unveiled a total of 13 allegations against the platform, a primary one being the operation of an unregistered exchange.
Furthermore, Binance has grappled with regulatory hurdles in several European nations, including Belgium and Austria. This comes as the exchange gears up to align with the European Union’s imminent Markets in Crypto Assets (MiCA) rules.
Adding to the challenges, Paysafe, which served as Binance’s payment ally in Europe, recently terminated its services for the exchange’s user base.