In May 2020, when the investment in Tokocrypto was first announced, Binance purchased a 60% stake in the business, and is now acquiring the remaining 40%, a source with direct knowledge of the matter told The Block. The Block had revealed at the time that Binance's investment in Tokocrypto gave it a majority or controlling stake.
Tokocrypto today announced that Binance “will gradually increase its stake to nearly 100%,” building on its previous investment in 2020. Binance CEO Changpeng "CZ" Zhao tweeted that "Binance was the majority shareholder of Toko[crypto] from the beginning. Just injected more cash and increased our shareholding a bit."
A Binance spokesperson declined to comment to The Block when contacted about the stake acquisition percentages. Rieka Handayani, vice president of corporate communications at Tokocrypto, also declined to comment on those details.
“In light of this upcoming deal, Tokocrypto will make some changes to their organizational structure to better adapt to the refreshed business model,” today’s announcement reads. “The company’s founder and CEO, Pang Xue Kai, will step down from his position and pass the helm over to Yudhono Rawis, who will step in as Interim CEO. Pang Xue Kai will become part of Tokocrypto’s Board of Commissioners and continue to provide leadership support in his new role.”
Tokocrypto will also reduce its headcount as part of the deal, according to the announcement. An “employee adjustment of around 58%” is expected, Handayani told CoinDesk. The company reportedly laid off 45 employees, or about 20% of its workforce, in September.
Tokocrypto was founded in 2018 and is regulated by Indonesia's Commodity Futures Trading Regulatory Agency (locally known as Bappebti). It is one of the largest exchanges in Indonesia, claiming to have more than 2 million registered users. It is backed by Singapore-based crypto market maker QCP Capital. QCP was a founding investor in Tokocrypto and will no longer hold a stake in Tokocrypto after the Binance deal, the source said.
QCP, which was left with at least $97 million stuck on FTX after the crypto exchange filed for bankruptcy last month, declined to comment.
Tokocrypto's native token is currently trading 15% up at around $0.33, according to CoinGecko.
Binance appears to be targeting the Asian market for expansion lately. Last month, the company acquired Japan-based licensed exchange Sakura Exchange BitCoin (SEBC) for an undisclosed sum. Earlier this year, it bought a strategic stake in Malaysian crypto exchange MX Global.
Binance hopes to invest more heavily in crypto firms in the near future. It recently announced a $1 billion "industry recovery initiative" to help mitigate fallout stemming from FTX's collapse. The initiative will invest in otherwise strong firms that are facing a liquidity crisis. Jump Crypto, Polygon Ventures, GSR, Animoca Brands and others are also part of Binance's initiative and have together committed around $50 million.