Binance is a large crypto exchange handling around $7.7 trillion (£6.34 trillion) in cryptocurrency transactions last year.
ChangPeng Zhao, the former chief technology officer of OKCoin and former blockchain.info employee, launched Binance in Hong Kong in 2017.
The exchange grew quickly but has been subject to regulatory restrictions that led the company to move head office to the Cayman Islands and migrate to new servers.
Binance Coin (BNB) is the token issued by the exchange and is currently the fifth largest token by market cap behind Bitcoin, at $52.39 billion (£43.17 billion), according to Yahoo Finance. The exchange also. handles a broad selection of altcoins.
The Binance Crypto Exchange
Crypto traders can exchange over 500 cryptocurrencies on Binance, although access is limited to 52 tokens for US account holders.
The platform manages up to 1.4 million transactions a second and supports most big cryptos, including Bitcoin, Litecoin and Ethereum.
Users can also hold smaller currencies such as Harmony and Dogecoin, with withdrawals available in 46 fiat currencies.
Major rivals include Kraken and Coinbase, but despite bans on the platform in the UK, US, China, Thailand and Japan, Binance remains the largest exchange by volume, with a weekly trading activity of over $16 million (£13.18 million), compared to $2 million (£1.65 million) managed by Coinbase Exchange.
American users access the exchange through Binance.US, which the company reports are a separate exchange not available in all states.
CoinMarketCap publishes updated lists of spot exchanges, including weekly user visits and average liquidity scores.
Zhao initially founded Binance in China but relocated when the Chinese government started to limit cryptocurrency trading in 2017. The company moved to Japan and then to Malta before relocating again to Bermuda and settling in the Cayman Islands.
Binance Exchange Statistics
Binance user numbers have grown from 1.5 million in 2017 to 28.6 million in 2021. Annual spot trading figures for 2021 were seven times greater than the previous fiscal year, with a peak 24-hour trading volume of $76 billion (£62.56 billion).
The cryptocurrency exchange is privately owned and reported figures as below, converted into approximate GBP:
|Year||Profit||Users||Peak trading volume||Annual exchange volume|
|2017||£6.2 million||1.5 million||£2.5 billion||£48.6 billion|
|2018||£700 million||13.3 million||£15.6 billion||£425 billion|
|2019||£469 million||16.5 million||£12.4 billion||£330 billion|
|2020||£741 million||21.5 million||£28.8 billion||£880 billion|
|2021||Not declared||28.6 million||£62.6 billion||£6.3 trillion|
Binance does not disclose revenue figures and only publishes net profit data.
Analysts consider the Binance Coin a driving factor behind the exchange’s success, as the token has quickly risen in worth and utility.
The Initial Coin Offering (ICO) in 2017 raised $15 million (£12.35 million, with Binance, ranked as one of the third largest global exchanges within 143 days of launch.
New crypto tokens are accepted and on-boarded rapidly. However, this policy has caused controversy with reports that some blockchain products pay 400 BTC or higher, valued at roughly £7.9 million, to be listed on Binance.
Binance Controversy And Regulatory Issues
Forbes published documentation in October 2020 alleging that the business had deliberately set up the Binance corporate structure to mislead US regulators.
The publication also alleged that Binance had proactively shown users how to bypass IP blocks, which control the locations from which users can log in or create an account.
The Financial Conduct Authority (FCA) banned Binance from conducting any regulated activities in 2021 in the UK as part of a broader crackdown on cryptocurrency trading.
Because the exchange is not based in the UK, Binance advised that the restrictions would not impact British user accounts. However, some users reported that they could no longer make deposits or withdrawals.
In 2019, the US regulator had taken a similar stance, resulting in Binance disabling the exchange for all US users and relocating their trading accounts to Binance.US.
The Binance.US exchange is run on a separate website with a smaller range of crypto coins and was previously referred to as a partner business.
Investigations by the US government began in 2021, looking into potential insider trading and market manipulation alongside fraud and tax evasion allegations.
In 2022, Binance initially stated that it would freeze Russian accounts following the invasion of Ukraine but later changed its stance and refused to limit account access. Following pressure, the exchange froze accounts with €10,000 or more (£8,482).
A report by the Wall Street Journal in February 2022 indicated that the Securities and Exchange Commission is examining the relationship between the two firms, which are both owned by the founder, Zhao.
Binance offers several security tools designed to improve confidence.
The Binance Smart Chain (BSC) uses a proof-of-stake authority to validate all transactions in the exchange. This chain runs parallel to the Binance Chain and was designed to work with Ethereum and support associated DApps.
The Binance ecosystem comprises two-factor authentication, FDIC insurance coverage for balances held on Binance.US, whitelisting tools for blockchain addresses and cold storage options to protect user accounts.
Other features include:
- Low trading fees: 0.1 per cent charges on spot trades and 4.5 per cent on debit or credit card purchases.
- Multiple cryptocurrencies: Binance offers over 700 tokens for global traders, with around 100 for Binance.US traders. This figure compares to 179 currencies available on Coinbase.
- Supported transactions: traders can apply for market orders, stop-limit orders, post-only orders, trailing stop orders, and engage in peer-to-peer trading, margin trading and one-cancels-the-other orders.
Binance is one of the lowest-cost crypto exchanges to trade on but does not have a built-in digital wallet. Users instead have the option to use Trust Wallet, a third-party digital wallet.
The Binance Academy is similar to the Cryptopedia crypto content platform on Gemini and provides articles and tutorials as trading courses for new users, alongside a knowledge base and blogs.
Binance Exchange FAQ
Although the FCA has banned regulated activities, UK traders can still use Binance to buy and sell crypto because the exchange is not based in Britain.
Binance Markets Ltd, registered in London, is not authorised to conduct any activities in the country, but Binance.com does not fall under this remit.
The FCA has not disclosed the reasons for the restrictions on Binance, but this is believed to be around concerns about consumer protections and the possibility of money laundering.
As a regulator, the FCA does not have powers to regulate cryptocurrency but does grant authority to companies who wish to sell or advertise products related to crypto assets.
Any business registered and operating in the UK and providing cryptocurrency services must register with the FCA and demonstrate compliance with anti-money laundering rules.
Binance transactions must be worth $10 (£8.24) as a minimum. Users cannot trade a cryptocurrency if the value is under this threshold.
There are also minimum order limits for Binance Futures contracts, which must hold a notional value of at least $1 (£0.82).
Binance levies a fee of 0.1 per cent for platform trades, plus a charge of 0.5 per cent for instant buy and sell transactions, so costs vary depending on the value of the trade.
Purchases made by debit or credit card attract a 4.5 per cent transaction fee.
In contrast to most large exchanges, Binance publishes fee structures, which can vary between the status of the user account, their BNB balance, and the nature of the trade.
Many exchanges do not openly disclose charges, but you can access the rates on Binance Trading Fees.
Kraken is one of the main Binance competitors and charges between 0.16 and 0.26 per cent for professional accounts.
Other recreational users pay 0.9 per cent fees for stablecoin transactions and 1.5 per cent for all other cryptocurrencies.
BNB token holders also receive a 25 per cent discount on their transaction charges if they use the native token to cover account costs.
Binance is generally considered a safe trading platform due to two-factor authentication to protect user accounts.
In 2019 a major hack resulted in the theft of 7,000 Bitcoin, but Binance covered the losses through an emergency insurance fund called the Binance Secure Asset Fund for Users (SAFU).
The SAFU is worth $1 billion (£820 billion) and was funded through deposits of 10 per cent of all trading fees to generate a sufficient value to safeguard user transactions.
Binance promises a response to support tickets raised within 24 hours with a Live Chat option.
There is also a large support bank and a FAQ section with an automated bot to help users find the answers to their questions.
Once a support ticket has been submitted, it is assigned a case ID that users can quote to contact the Binance Help Desk via Twitter or Reddit.
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