Coinbase Global, Inc. vs Binance

Brian Armstrong was working as a software engineer at Airbnb in 2012 when he read the Bitcoin whitepaper and became convinced it was transformative. He quit Airbnb and co-founded Coinbase with Fred Ehrsam, a former Goldman Sachs trader, through Y Combinator. Their thesis was deliberate and contrarian to the rest of the crypto industry: compliance and regulation were not obstacles to be avoided, but competitive advantages to be pursued. While other exchanges operated offshore to avoid regulatory scrutiny, Coinbase sought every licence it could obtain. The strategy was expensive and slow. It proved decisive.

Coinbase had 13,000 users in 2012. By 2017's Bitcoin bull run, it had 15 million. The exchange became the on-ramp for mainstream America's first crypto purchases — the place where people converted dollars into Bitcoin for the first time. Coinbase built a custody business alongside its exchange: institutional-grade cold storage for Bitcoin and other digital assets, targeted at hedge funds, corporations, and sovereign entities that wanted crypto exposure but required enterprise security and insurance. The custody service would later become the most strategically valuable part of the business.

Coinbase went public through a direct listing on Nasdaq in April 2021, with shares opening at $381 and giving the company a market capitalisation of approximately $85 billion on day one. The listing was the first of a major crypto company on a US stock exchange and was widely interpreted as a coming-of-age moment for the crypto industry. At peak, Coinbase's market cap exceeded $100 billion. The company earned $1.8 billion in revenue in Q1 2021 alone, driven by trading fees during the crypto bull market.

The crypto market crash of 2022 devastated Coinbase: revenue fell 57% year-on-year, the company reported a $1 billion net loss, and its stock fell from $381 to below $40. The SEC sued Coinbase in June 2023, alleging it had been operating as an unregistered securities exchange. The case went to court and became the central regulatory battle defining whether crypto assets were securities. Coinbase fought back aggressively, arguing that the SEC's approach was regulatory overreach that would destroy the US crypto industry by driving it offshore.

Coinbase reported $6.6 billion in total revenue for 2024, with net income of $2.6 billion. The company's strategic position had been cemented by one development above all others: when the US Securities and Exchange Commission approved spot Bitcoin ETFs in January 2024, followed by Ethereum ETFs in May 2024, virtually every major issuer — BlackRock, Fidelity, Ark, VanEck — chose Coinbase as their custodian. The most regulated crypto company in the United States had become the safekeeping infrastructure for Wall Street's entry into crypto. Every dollar that institutional America moved into Bitcoin or Ethereum passed through Coinbase custody. The Airbnb engineer who had believed in compliance as a competitive advantage had been right.

Changpeng Zhao — universally known as CZ — was born in Jiangsu province, China in 1977. His family emigrated to Canada when he was a teenager. He studied computer science at McGill University, then worked at Bloomberg Tradebook developing futures trading software, and later founded Fusion Systems in Shanghai building high-frequency trading systems. In 2013, a friend told him about Bitcoin at a poker game. CZ sold his Shanghai apartment and bought Bitcoin. In 2014 he joined Blockchain.info, then became CTO of OKCoin. By 2017, he had decided to build his own exchange.

Binance launched in July 2017, raising $15 million in an ICO eleven days before trading began. Within six months, Binance had become the world's largest cryptocurrency exchange by trading volume — a pace of growth that had no precedent in financial history. The platform differentiated on three dimensions: speed of listing new tokens (exploiting the ICO boom), low fees, and a native utility token (Binance Coin, BNB) that gave holders trading discounts. CZ also launched Binance Smart Chain in 2019 — an Ethereum competitor that attracted the DeFi ecosystem that Ethereum's high gas fees were excluding. CoinMarketCap was acquired for an estimated $400 million, giving Binance influence over the information layer of the crypto market.

When FTX collapsed in November 2022, Binance was initially seen as both its cause (CZ announced he was liquidating his FTT holdings, triggering the bank run) and its saviour (Binance briefly considered acquiring FTX before discovering the $8 billion hole in its balance sheet). The episode eliminated Binance's largest competitor and left CZ as the undisputed kingmaker of crypto. Binance processed $34 trillion in trading volume in 2021 alone. At its peak, CZ's estimated net worth reached over $100 billion — placing him among the wealthiest people in the world.

In November 2023, Binance agreed to plead guilty to US federal charges of enabling money laundering and violating sanctions enforcement laws, paying $4.3 billion in fines — the largest settlement in the history of the crypto industry. CZ resigned as CEO, was replaced by Richard Teng, and pleaded guilty to a single charge of violating the Bank Secrecy Act. He was sentenced to four months in a federal correctional institution in April 2024 and released in September 2024. In October 2025, President Donald Trump pardoned CZ, wiping his criminal record. CZ called it "not expected."

Binance reported $16.8 billion in revenue for 2024 — a 40% year-on-year increase — generated primarily from trading fees on spot and derivatives transactions. The exchange held $160 billion in user assets under custody and commanded approximately 39% market share among centralised cryptocurrency exchanges. Under CEO Richard Teng, Binance had obtained regulatory approvals in over 20 jurisdictions following the DOJ settlement. BNB — Changpeng Zhao's personal crypto holding representing 98% of his portfolio — had a market cap exceeding $90 billion. CZ's estimated net worth in mid-2025 was between $65 and $111 billion, depending on BNB's price. The exchange he had built in 180 days remained the most dominant financial platform in crypto.