Overview of Binance
Binance is a cryptocurrency exchange founded in 2017. It is currently one of the biggest in the world by trading volume and number of customers. Today, Binance is focusing on growth, expanding into more countries, and dealing with the regulatory issues it faces in multiple jurisdictions and territories.
Binance was founded in 2017 by Chinese-Canadian businessman Changpeng Zhao. Zhao graduated from McGill University with a degree in computer science in the 1990s and later moved to Shanghai where he launched Fusion Systems, high-frequency trading software for brokers. Thanks to his various businesses and investments, Bloomberg believes that Zhao is one of the richest people in the world, with a net worth of more than $14.9 billion as of May 2022.
What are the main services offered by Binance?
As one of the largest cryptocurrency platforms in the world, Binance has one of the largest invested heavily in expanding its service offerings.
Buy and sell cryptocurrency
Binance’s main function is to enable customers to buy and sell cryptocurrencies. It accepts bank deposits, credit/debit card purchases, in-house e-wallet cash balance purchases, bank transfers, and P2P trading with other platform users. Accepted fiat currencies include EUR, USD, GBP, CHF, TRY, CHF, SEK, VND and much more.
Binance Earn is a one-stop hub that shows users all the yield earning possibilities available to them, given the cryptocurrencies that they currently hold. The dashboard shows the returns they can make for fixed and locked savings durations.
Trade Crypto Futures
Binance lets users trade a variety of futures products from their dashboards.
- USDⓈ-Margined Futures are linear futures quoted and settled in BUSD or USDT. These features make it easy for investors to calculate their returns in fiat
- COIN-M Futures are derivatives that derive their value from underlying cryptocurrency. The instrument exposes users to crypto without requiring them to own it. Each COIN-M Futures contract is fixed at 100 USD, while Bitcoin is used to fund the initial margin and calculate profit and loss.
- Binance Leveraged Tokens give you leveraged exposure to a range of crypto-related underlying assets, with each unit representing a basket of perpetual contract positions. Leveraged token prices move with price changes in the perpetual contract market.
- Binance Options are derivative contracts that provide the purchaser with the right to buy or sell a crypto asset at a predetermined price and date. Binance Options give traders additional protection against loss and risk.
Binance Card is a Visa branded debit card that gives holders the ability to hold and exchange cryptocurrencies while making payments, leaving the rest in secured wallets. Binance offers up to 8% BNB cashback every time users spend on eligible purchases. Users can begin using their virtual cards immediately after applying.
Binance provides borrowers with personalized crypto loans in a variety of currencies from 7 to 180 days. They can use a variety of supported cryptocurrencies as collateral and can repay at any time. To qualify, you must be a registered users of Binance.
Binance Pay is a borderless and contactless cryptocurrency payment technology designed by Binance in-house. The zero-fee system makes it easy to send lightning-fast payments in over 200 cryptocurrencies to friends, family, and businesses across the world.
Binance Gift Card
The Binance Gift card is a prepaid crypto voucher that businesses can issue to customers outside of the Binance API. The platform is designed for eCommerce purchases, loyalty, game rewards, and much more.
Liquidity farming lets cryptocurrency holders become liquidity providers on the Binance platform, allowing them to earn transaction fees and flexible interest rates.
Dual investment is a structured savings product, promising higher yields involving two different currencies. Users subscribe to Binance’s platform and then select the deposit currency, underlying asset, settlement date, and subscription amount. They then receive returns in deposit currency if the product is not exercised, or returns in the alternative currency if exercised.
What is BNB?
Binance Coin (BNB) is a cryptocurrency developed by Binance to trade and pay fees on its exchange. Similar to other digital assets, the value of BNB rises and falls depending on the value traders ascribe to it. Many users hold BNB off the Binance exchange in both “hot” and “cold” wallets.
How does Binance make money?
Binance makes money through a variety of methods, similar to other trading platforms. However, the sheer range of products it offers means that its revenue streams are more diverse than most.
- Mining services: The platform launched two mining pools for BTC and ETH in 2020, charging users 2.5% and 0.5% pool fees respectively.
- Trading fees: When users buy or sell cryptocurrencies on the platform, they must pay 0.1% on each trade they initiate.
- Withdrawal fees: Users must pay when withdrawing their profits.
- Cloud products: Binance charges annual fees for software-as-a-service products
- Loan interest: Binance sells cryptocurrency loans to users, making money from the interest that it charges on them.
- Interchange fees: Binance launched a debit card in 2020 that let users make payments from their spot wallets in partnership with card payments processing company, Visa. The platform charges an interchange fee whenever cardholders make purchases with their cards.
- Spread: Binance profits from the difference between the ask and bid price for currencies listed on its exchange.
What are the fees on Binance?
Binance in the U.S. charges a flat 0.1% spot trading fee for regular users, which is considerably lower than most other platforms (and even cheaper when running special offers). Users with large BNB balances can access trading fees as low as 0.02%.
Is Binance safe to use?
Most analysts consider Binance to be a safe platform to use, thanks to its industry leading security practices and infrastructure. However, Binance’s track record is not perfect. In May 2019, the platform experienced a major hack that resulted in the theft of more than 7,000 BTC – equivalent to $40 million. Although customer funds were compromised in the hack, Binance did reimburse all funds that customers may have lost.
Theft has been a part of cryptocurrency exchanges’ infrastructure since their inception. Binance is by no means the only victim. Analysts estimate that hackers got away with more than $356 million in 2019 alone, mainly from smaller exchanges.
When Binance’s attack occurred, the company was transparent about what happened. Zhao Changpeng reported that hackers used a variety of phishing techniques and viruses to execute a patient and well-orchestrated attack on the company’s infrastructure, bypassing many of its checks. Hackers were able to gain entry into multiple high-net-worth “hot” accounts and drain them of funds.
Since then, Binance’s record has been fairly clean. In response to what happened, the company implemented numerous security features to prevent similar hacks in the future. Now Binance operates a 360-degree risk management system and real-time monitoring using advanced data privacy tools.
Platform security includes:
- Advanced data encryption: Binance protects user data and personal information (such as “know-you-customer” data) in end-to-end encrypted storage. This ensures that only users can gain access to their personal information.
- Real-time monitoring: Binance operates an in-house team who assesses all two-factor authentication reset requests, email address changes, password resets, and withdrawal attempts. Any unusual activity results in 24 to 48-hour account suspension to safeguard users.
- Organizational security: Binance implements multi-signature and threshold signature schemes to protect users’ funds.
- Secure storage: Binance now offers most users the ability to store funds offline in cold storage.
User-level security includes:
- Access control: Binance gives users the ability to opt-in to features, such as wallet address and IP whitelisting, device management, and API access control.
- Security notifications: Binance customers get immediate security alerts in the event the platform discovers any suspicious activity on their account.
- Safe sign-in: Binance operates strict two-factor authentication sign-in protocols, supporting a range of hardware, email, and SMS methods.
Binance also works to prevent money laundering, responsible trading, and capital gains tax reporting. It runs continual campaigns to educate users about the digital threats they face and how they can mitigate them.
Is Binance regulated?
Binance is not consistently regulated around the world. While it can operate in most countries, there are growing restrictions.
In 2019, U.S. authorities banned Binance from operating. In response, the platform set up Binance.US, a separate arm of the company registered by the United States Financial Crimes Enforcement Network. The U.S. version offers similar features to the global version, though it remains banned in some states.
Binance used to operate its headquarters in China. However, it later moved to the Cayman Islands, due to increased regulation on cryptocurrency in the country.
In June 2021, Japan’s Financial Services Agency told Binance that it was not registered to do business in Japan. It was the second such warning the platform received.
In July 2021, Britain’s Financial Conduct Authority forced Binance to stop all regulated activity in the UK while it investigated the platform’s compliance with anti-money laundering rules.
However, Binance won regulatory approval in France in May 2022. France is the first European country that allows Binance to operate.
Binance has been making gaining regulatory licenses as a priority in all the countries they operate in. The exchange is working closely with governments around the world to make sure the products and services they offer comply with local laws.
Is Binance insured?
Binance.US does have Federal Deposit Insurance Corporation (FDIC) insurance on all USD balances up to $250,000 on the platform. Cryptocurrencies and stablecoins are not eligible for FDIC insurance as well as assets held on Binance.com.
For all digital assets on Binance, the exchange does have an internal insurance fund called the “Secure Asset Fund” (SAFU). This fund is meant to protect customers should a security breach occur on Binance and customers lose funds.
In what countries is Binance available?
Binance does not provide a list of countries in which it operates. Until recently, users could access Binance in practically any country. However, following a series of high-profile crackdowns, that is no longer the case. China, the UK, Malaysia, Japan, and Thailand ban users from trading on Binance while Europe allows regular trading but bans derivative trading.
For U.S based users, Binance has a separate exchange, called Binance.US, where customers can trade crypto in a regulated and compliant manner.
How do I open a Binance account?
To open a Binance account, you need to:
- Go to Binance.com and click Register
- Enter your name, mobile number, and password for your account
- Read the terms of service and click Create Account
- Complete the security verification test by entering the 6-digit SMS security code sent to your phone in the box within 30 minutes
- Log into your new account
- Set up two-factor authentication by clicking Go To Dashboard and checking the two-factor authentication option
Binance lets you set up your account before concluding the “know-your-customer” (KYC) process. However, non-verified accounts have limited functionality.
The purpose of KYC documents is to reduce money laundering and financial fraud. Regular mainstream banks and brokerages have had to collect KYC information in the U.S. since the introduction of the USA Patriot Act in 2001.
To confirm their identity, Binance asks users to supply images of their driver’s license, passport, PAN card, voter ID card, and/or social security number. You can also provide utility bills to prove your home address.
How to withdraw from Binance?
Withdraw to your bank account
You can withdraw fiat currency, such as USD, directly to your bank account. To do this, you will need to enter your bank account information into the Binance “Withdraw Fiat” form. After you have entered your bank information, you can choose how much you would like to withdraw and confirm your request. Your money should arrive in your bank account within 1-3 business days.
Withdrawing crypto from Binance is a fairly straightforward process and shouldn't take more than a few minutes to complete.
- Log into your Binance account and go to the 'Funds' section.
- Select the 'Withdrawals' tab.
- Choose the currency you want to withdraw and enter the amount.
- Enter your withdrawal address (this is where you'll be sending your coins/tokens to).
- Review all the details of your withdrawal and click 'Submit'.
- You will then receive an email confirmation of your withdrawal request and asked to enter your two factor authentication code.
- Once your withdrawal has been processed, the funds will be sent to your wallet address.
What sort of customer support does Binance offer?
Binance began offering live 24/7 customer support in December 2018, just 18 months after the platform launched. Originally, support was only available in Chinese. However, by April 2019, customers could connect to English-speaking reps as well.
Since then, Binance has continually expanded its team, now offering over-the-phone and text-based chat to Spanish, Turkish, Korean, Russian, and Portuguese users. It has more than 150 customer service agents operating in twenty countries, working at four sites across the world, processing over 1,000 tickets per day relating to margin trading, futures, options, and account security issues.
Binance says that it plans to offer more customer support in Southeast Asia and Europe going forward with a view to developing itself into a truly global brand. Users can get help with account verification, trading fees, recurring buy options, trade troubleshooting, buying and selling crypto, depositing money into their accounts, and withdrawing crypto profits.
To use customer service, users must first navigate to the Submit a Request page. They will then receive confirmation via email from Binance confirming their request and a ticket number.