Why Trust Wallet, the Binance founder-owned crypto app, is looking to the UAE

Even before the US government demanded that Binance Holdings to pay US$4.3 billion in fines and accused its founder Changpeng Zhao (CZ) of various crimes, the crypto exchange had been facing significant regulatory challenges globally.

Australia canceled Binance’s license for a derivatives operation and searched several of the company’s locations there. Singapore ordered the firm to stop doing business in the city state. Hong Kong warned more than two years ago that Binance was an unregulated platform. Even Dubai, where CZ primarily resides, has yet to grant the exchange full authorization. 

But beyond the embattled exchange business, another corner of the broad CZ-owned portfolio of crypto companies said it’s seeing growth in countries like India and Pakistan – based on third-party data on downloads – as well as business opportunities in the United Arab Emirates (UAE).

Trust Wallet is a software-based crypto wallet service designed to let users self-custody the kinds of digital assets popular in decentralized finance applications. CZ acquired a majority stake in the company that operates Trust Wallet in 2018. Its current CEO since 2022, Eowyn Chen, was previously a vice president of marketing at Binance. 

“I do want to make Asia a high priority for growth,” Chen, who is 33, told Bloomberg News in an interview on the sidelines of a crypto conference in Australia last month.

Chen identified South-east Asian countries including Vietnam, the Philippines and Indonesia as markets to expand for the platform. “I would imagine the average revenue per user in those places will be lower, but the collective amount could potentially also be very interesting,” she said.

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Globally, the app-based service has 56 million downloads on iOS and Android, making it the most popular crypto wallet for handheld devices, according to Data.ai.

Rival MetaMask is second, with 43 million such downloads. In India, Trust Wallet saw about 8.5 million downloads and in Pakistan some 3.5 million, followed by MetaMask, according to Data.ai.  

Despite the perceived growth potential in Asia, it is to the United Arab Emirates that the company is shifting its operations. 

Chen herself moved to Dubai from Virginia in October, while the company will be based in Ras Al Khaimah, the sixth-largest city in the UAE. The company has about 80 employees worldwide with about 15 per cent to 20 per cent in the UAE, Chen said. 

“The regulatory uncertainty in the US is a challenge,” Chen said. “So we are also diversifying our risk management from a corporate perspective by setting up the UAE entity.”

Chen described regulators in the UAE as having a “friendlier outlook toward crypto in general”. That gives Trust Wallet confidence about the likelihood of “reasonable regulation on decentralized finance,” Chen said.

Chen said Trust Wallet operates from the free trade zone of Ras Al Khaimah, where it has a business license. The zone is also known as RAK DAO, for “Digital Asset Oasis,” and caters primarily to blockchain companies.

RAK has “more flexible and better corporate treatment” for web3 companies, she said in explaining the reasons for basing operations there. Officials at RAK DAO declined to comment.

A separate company, DApps Platform, holds the intellectual property rights for the wallet service and is based in Abu Dhabi Global Market, another free trade zone in the UAE, Chen said. 

CZ and Trust Wallet

Trust Wallet is not profitable yet, Chen said, and only started generating revenue in the last year. 

While CZ doesn’t have any role in Trust Wallet’s day-to-day operations, he provides “operational strategic advice” as the majority owner of the entity. CZ “brings a lot of spotlight and exposure” when he talks about Trust Wallet, Chen said.

Trust Wallet’s native token TWT jumped about 50 per cent to US$2.48 in a single day last November, after CZ promoted the app on X in the immediate aftermath of the collapse of Sam Bankman-Fried’s FTX crypto exchange. It was trading at about US$1.11 as of 2:15 pm on Friday (Dec 1) in Singapore, according to data from CoinGecko.

“We don’t have much marketing budget. We probably only spend about a few thousand dollars per month on marketing,” Chen said. “A lot of our growth happened organically or with word-of-mouth promotions,” she said. 

CZ’s settlement with US prosecutors saw him resign as CEO of Binance, where he was replaced by Richard Teng. CZ additionally relinquished his role as chairman of Binance’s US exchange while retaining an economic interest in that beleaguered platform. 

Binance recently launched a similar, branded crypto wallet that appears to compete directly with the Trust Wallet platform – and it remains to be seen whether Teng will seek to expand the Binance product aggressively. BLOOMBERG