The Real Story of Binance’s Acquisition of JEX

Editor's Note: This article comes fromBlock beats BlockBeats (ID: BlockBeats), Author: 0x29, reprinted by Odaily with authorization.

Editor's Note: This article comes from

Block beats BlockBeats (ID: BlockBeats)

Block beats BlockBeats (ID: BlockBeats)

, Author: 0x29, reprinted by Odaily with authorization.

On the afternoon of September 2, He Yi was anxiously waiting for a document.

As the co-founder of Binance Exchange, she is going to announce a Binance strategic decision today, but she has to see the crucial signing document in person to confirm the content of the announcement.

The result of the wait is now known to everyone: Binance Exchange wholly acquired the team and business of the JEX platform. Block Beats learned that the acquisition amount is worth hundreds of millions of RMB, partly paid in cash, and partly presented in the future profits of JEX.

The background of this acquisition is Binance’s focus on cryptocurrency derivatives, and they need talents for derivatives innovation. In the Bitcoin bull market in 2019, many second- and third-tier exchanges began to launch various derivative products to attract traffic, and indeed more and more users began to use derivative products.

In terms of derivatives, Binance has clearly begun to speed up its progress. Leverage was launched first, followed by futures testing, and now it has acquired JEX, which mainly focuses on options products. Obviously, Binance is also very interested in option products. “There will definitely be option trading.” He Yi said in an interview with BlockBeats.

Coincidentally, when reviewing the complete process of this acquisition, I found that this is a story containing elements of the top three domestic exchanges. OKEx, Binance, and Huobi are all the protagonists of this story at different times. The last day of completion comes together and is a "big tree attracts the wind" in the currency circle.

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A team worth hundreds of millions of RMB

Binance founder and CEO Changpeng Zhao, Binance co-founder and CMO He Yi, and JEX founder and CEO Chen Xin met for the first time five years ago.

In 2014, He Yi and Chen Xin joined OKCoin successively, serving as OKCoin vice president and product manager respectively, and then He and Zhao Changpeng also joined OKCoin as CTO. In an interview that year, Changpeng Zhao generously stated that "OKCoin is the best bitcoin trading platform in the world." But the three of them did not persist in this "world's best trading platform". They left OK in 2015 and 2016. Zhao Changpeng left the earliest, followed by He Yi and Chen Xin.

"Actually, after leaving OK, Zhao Changpeng and Chen Xin worked together for a while." He Yi revealed that they worked on a project together. However, this period of time is not long. Zhao Changpeng established Binance in June 2017, and Chen Xin also began to study his own project.

However, these two periods of working together have become an important prerequisite for the acquisition of a total amount of several hundred million yuan in the future.

For this valuation, He Yi himself does not have an accurate formula to support it. In other words, it is not the value of JEX Exchange that is several hundred million, but the team of Chen Xin. "Based on what I know about them, I'm very comfortable with them, which plays a very important role in my judgment of the value of this merger."

He Yi said two things to explain her reassurance. One is that when they were working together, Chen Xin and the others did not pay in direct proportion to what they received, but they did not take advantage of their positions to make profits because they felt unfair; After the announcement of the merger between Binance and JEX, the price of JEX tokens soared nearly 4 times, but Chen Xin's team did not sell their own JEX tokens.

But JEX is not completely without problems.

In the conversation with BlockBeats, our first impression is that Chen Xin is a person who does not sell himself very much. He almost never answered a sentence of more than 20 characters. This also seems to reflect the status quo of the JEX platform - even with cryptocurrency option products that are rare in the world, JEX is not well-known in the eyes of leeks. In the currency speculation group, the mention rate of some emerging exchanges is much higher than that of JEX. "They don't have He Yi." He Yi summed up the problems of JEX in one sentence.

Just like the acquisition of Mobike by Meituan, Meituan is for traffic, and Mobike is for survival. Looking back at this acquisition, it is more like a reciprocal benefit. Binance needs talents, innovation, and new products. What they need is the creativity of people like Chen Xin in cryptocurrency derivatives; while JEX can rely on Binance, the world's largest platform, and no longer consider traffic issues, but only think about product design.

But this seemingly win-win acquisition did not go so smoothly.

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A bumpy year for acquisitions

After JEX was acquired, the JEX platform currency soared nearly 4 times. Many investors in the secondary market found that the trading volume of JEX/BTC increased in July and August. "Actually, the acquisition was not finalized at that time," He Yi said.

This acquisition dates back to two years ago.

Because of the early acquaintance, He Yi had an idea when Binance was established and invited Chen Xin to join. Therefore, when Chen Xin and others launched JEX at the end of 2018, the acquisition exchange between Binance and JEX began, and lasted intermittently for a year. To sum it up, I got stuck in two places.

The first is price. At the end of 2018, Binance was developing rapidly and hoped to acquire JEX to supplement talents. But the price JEX offered at the beginning of 2019 directly scared He Yi away. At that time, JEX hoped to create a market segment with its own products, and wanted to try to gain a group of loyal users without relying on operations.

The second time, JEX accepted the idea of ​​being acquired by Binance. They have realized that operating this short board is essential for the exchange, so they lowered the price, but they got stuck in the process.

JEX has its own platform currency, how to arrange these platform currency is a problem; what Binance needs is a wholly-owned acquisition of JEX, but among the shareholders of JEX, there is one of Binance’s main competitors - Huobi Exchange, how do shareholders Coordination is another problem. If there are competitors among the shareholders of JEX, Binance can only give up the acquisition.

On September 2, the JEX team first released an announcement, expressing its strategic cooperation with Binance. At this time, the contract signed by Huobi to withdraw from the JEX equity has not yet been handed over to Binance. He Yi has been waiting, she must see Huobi's signed documents with her own eyes.

For this reason, she specially prepared two contracts on the table. If Huobi’s exit document was not seen that day, Binance would abandon the acquisition and change it to cooperation, which has a completely different meaning.

A few hours later, He Yi finally saw Huobi's signed contract, and she immediately arranged for the announcement of Binance's acquisition of JEX. "That's when I really dared to say that I decided to acquire JEX." He Yi said.

“I think this is a purely financial investment, just make money.” A source close to Huobi said, “Competition between exchanges is not the most important part of this investment. , Huobi’s first consideration is the return on investment.”