Introduction
In the rapidly evolving cryptocurrency landscape, Bitget has emerged as one of the largest exchanges. With daily trading volumes reaching around $8 billion, the exchange is now considering partnerships with U.S.-based firms to establish a foothold in America. This move comes on the heels of the incoming Trump administration’s expected pro-crypto stance.
Regulatory Challenges
For some of the largest crypto exchanges, such as Binance, ByBit, OKX, and Bitget, serving U.S. citizens is prohibited. Binance.US, the American arm of the largest exchange, has been significantly impacted by a $4.3 billion settlement between its parent company and U.S. authorities.
Bitget’s Consideration
In early 2022, Bitget considered acquiring U.S. state licenses to expand into the U.S. market. However, after the collapse of FTX, the climate became unfavorable due to ‘ridiculously high’ legal costs and intense competition with Coinbase. Even with potential regulatory clarity for crypto in the U.S. brought about by the Trump administration, new entrants would still face a complex landscape of state-based licenses and federal authorities.
Experience with Partnerships
Bitget has experience forging mutually beneficial relationships, such as a recent partnership with U.K. trading firm Archax, enabling compliance with British financial promotions rules.
"We are revisiting a U.S. strategy, although we have not decided on anything yet," said Bitget CEO Gracy Chen in an interview. "If we had a local partner who has many of those licenses already, then we could do a joint venture, for example. So we don’t need to go through all the applications. We might take that approach, but it’s not decided yet."
TON and Nigeria
Following the collapse of FTX and regulatory clampdowns on Binance, opportunities emerged for rival exchanges to pick up customers globally. Mobile app downloads tracked by Sensor Tower and web traffic data from SimilarWeb show significant growth areas for several top exchanges in places like Russia, India, and Nigeria.
Chen stated that her firm may have picked up some business previously belonging to Binance but emphasized that customer growth wasn’t solely due to the absence of competitors. Rather, Bitget’s innovative approach and sharp focus on user experience played a crucial role.
For instance, Bitget made a $30 million investment in TON, linked to Telegram’s popular messaging app, which led to a surge in Nigerian users. Many customers in Nigeria use TON for gaming purposes, receiving tokens airdropped into their wallets, and they needed easy access to deposit and trade these on an exchange.
"This strategy worked really well from the Nigeria side," Chen said. "There was a period of time when we had more downloads in Nigeria than Google or TikTok."
Global Expansion
Chen is aware that rival exchanges have aggressively courted Russian users and influencers since the Ukraine war began, particularly during conferences in Dubai (Data from Sensor Tower shows Bybit had over 1 million monthly active users in Russia in August). However, Bitget chose to hold back on expanding into Russia.
"Strategically, we thought we should stay away from the Russia/U.S. argument because sanctions were being imposed," Chen said.
India has not been a significant growth region for Bitget due to the lack of a clear regulatory framework. Despite this, Chen stated that Bitget is working with the government and has team members examining India’s market.
Challenges in Excluded Regions
Large crypto exchanges often face challenges when dealing with restricted territories such as China or the U.S. Users from these regions may find ways around know-your-customer (KYC) checks and use virtual private networks (VPNs) to circumvent IP-blocking measures, according to Chen.
"This type of activity happens a fair bit in China," she said, "where users may have a passport or drivers’ license attached to another country. I think all the major exchanges have business that comes from certain countries, such as China."
Leadership at Bitget
Chen, a Massachusetts Institute of Technology graduate who was promoted to CEO this year, is one of several Asian or Asian-American women steering the largest crypto companies. Others include Binance co-founder Yi He and OKX President Hong Fang.
In fact, Binance’s He is an old friend who introduced Chen to crypto back in 2015.
"I know her pretty well. She was a bridesmaid at my wedding. But today it’s kind of like a friend-enemy situation," Chen said.
Bitget’s exploration of the U.S. market highlights the complexities and opportunities present in the cryptocurrency landscape. As regulatory clarity emerges, Bitget and other exchanges will navigate these challenges to establish themselves in this lucrative market.