Don’t look now, but Binance is back on top

Last June, Binance seemed dead in the water. The SEC had just filed an explosive lawsuit against the leading crypto exchange, alleging the same kind of misconduct that brought down FTX and describing founder and CEO Changpeng “CZ” Zhao's empire as a "web of deception." The CFTC had brought its own civil complaint just a few months earlier, Binance's native token BNB was plummeting, and everyone was certain that the DOJ would file criminal charges any day.

Nobody—including, I'm guessing, CZ himself—could have anticipated where we would be today. The DOJ did end up filing charges, although not until November, leading to a watered-down settlement that omitted any allegations of misappropriation or fraud. And while the SEC is still pursuing its case, CZ got off with what amounts to a slap on the wrist—a four-month stint at a low-security prison near Santa Barbara, where inmates work on horse farms and spend much of the day outside, according to one prison consultant. He started his sentence in early June, as his nemesis, Sam Bankman-Fried, remains at one of the worst detention centers in the country, planning the appeal of his 25-year sentence.

Meanwhile, Binance is thriving. After months of speculation that BNB's precipitous fall could cause Binance to collapse, similar to FTX and its ill-fated FTT cryptocurrency, Binance's proprietary token hit an all-time high last week, cementing CZ's status as one of the wealthiest men in the world. On Saturday, the company triumphantly announced it had reached 200 million users, including 30 million new users in the first half of this year. And in perhaps the most significant sign of the company's recovered reputation, Mastercard quietly resumed support for payments on the exchange, after suspending services amid the regulatory overhang. With Visa and Mastercard competing on their crypto offerings, I wouldn't be surprised to see the latter relaunch its partnership on a Binance-branded card in the coming months.

When I interviewed Richard Teng, who took over as Binance CEO in April, he attributed the company's resurgence to its willingness to make amends with regulators, institute compliance measures, and comply with the U.S. government's burdensome monitorship requirements—a program, he said, that would also win trust with users. It's hard to argue with the results, especially viewing FTX as a foil.

Most of the success can likely be owed to the fact that Binance largely operates outside the U.S., from its operations to its offerings. Binance.US, of course, mostly failed following the collapses of 2022, though it still operates as a zombie company. And Binance is still grappling with the same type of unforced errors that defined its rise to the top. The fact that Tigran Gambaryan, the former IRS investigator turned Binance exec, will face more time in detention than his former boss shows that the company still has a ways to go.

And yet, if history books are ever written about the great Binance vs. FTX war, we already seem to have a clear victor: CZ, high atop his horse at a cushy prison in Central California.

Leo Schwartz
leo.schwartz@fortune.com
@leomschwartz

This story was originally featured on Fortune.com