With a 24-hour trading volume of $38 billion, Binance is the largest cryptocurrency exchange in the world by trading volume. It features a wide range of financial product offerings and describes its aim as being the infrastructure service provider in crypto. The exchange is mainly known for crypto-to-crypto trading and high transaction throughput by processing more than 1.4 million transactions per second.
Binance stands out among its peers due to its low transaction fees. Though the transaction fee differs according to the volume of the transaction, on average it is less than 0.10% per transaction. Binance users can also take benefit of multiple offers and discounts by paying using the exchange’s native BNB token.
Apart from the cryptocurrency exchange, the Binance ecosystem also supports other initiatives like Binance Research, Binance Charity and Binance Academy. Binance Research provides investors with data-driven and institutional-grade insights into the crypto space.
Binance Academy is a learning hub where users can learn about blockchain and cryptocurrencies in more than 20 languages. An open-access learning hub, it offers valuable education for everyone- from crypto beginners to crypto veterans.
Binance Background
Binance was founded in 2017 by Changpeng Zhao, a developer and former CTO of OKCoin. Initially based in China, it moved to Japan just before Chinese authorities’ crackdown on cryptocurrencies. It is now registered in the Cayman Islands.
Binance is the largest cryptocurrency exchange by trading volume with a daily trading volume of $38 billion. Its low transaction fees and variety of cryptocurrencies offered have enabled Binance to amass a large user base of more than 120 million registered users.
However, Binance has also run into regulatory issues in many countries. It is under investigation in the USA for money laundering and other tax offenses. A separate exchange Binance.US was later launched for the American market, but it is still unavailable in Hawaii, Idaho, Vermont, Louisiana, Texas, and New York.
In 2021, Bloomberg reported that the Justice Department and Internal Revenue Service had launched an investigation against Binance for money laundering and tax evasion.
In the same year, UK’s Financial Conduct Authority ordered Binance to halt all regulated activity in the country. It has also been issued warnings and fines in Japan, Netherlands, Thailand, and by the Ontario Securities Commission in Canada.
In August 2022, India’s Enforcement Directorate conducted raids and frozen bank accounts of the country’s leading exchange WazirX. The exchange was said to be owned by Binance which was denied by Zhao on Twitter.
Binance Exchange Pros
Multiple Coins Available
Binance has a large number of cryptocurrencies(more than 350) available. The sheer variety of coins offered makes Binance the preferred choice of users. From popular cryptocurrencies like Bitcoin(BTC) and Ether(ETH) to gaming coins like AXS and SAND, Binance has something for everyone.
Low Trading Fees
Binance has extremely low trading fees compared to its peers. This is perhaps a major reason customers flock to Binance for crypto trading. Though the fees vary according to the transaction volume and type of account, it is generally 0.10% or less. For example, a VIP 1-level account attracts a maker/taker fee of 0.09%/0.10% for spot trading. This comes down to 0.02%/0.04% on VIP 4 and above level accounts. Users can also get a discount for using BNB to pay for transactions.
Variety of Trading Options
Binance hosts several trading options such as spot trading, options trading, futures trading and swap farming. Apart from that, there’s an array of different types of orders to choose from. For Futures Trading, there’s the option of a limit order, market order, stop-limit order, stop market order, trailing stop order, post-only order, and strategy order.
KYC Regulations
Binance adheres to the KYC requirements of the territories where it operates. The process of identity verification adds a layer of security to the user’s account.
Passive Income
Binance Earn is a unique program where users can choose from a suite of products to grow their crypto holdings. They can earn passive income by subscribing to flexible products or locked products.
Binance Exchange Cons
Regulatory Concerns
Binance has come under the scanner in several countries. A criminal complaint was filed against it by Thailand’s financial regulator. Malaysia had also ordered Binance to shut shop in the country. This regulatory uncertainty has become a cause of concern for customers
Not Available in the US
The main Binance platform is not available in the US due to ongoing investigations by the IRS and Justice Department. Though Binance.US is there, it offers a fewer selection of coins and features than the global Binance platform.
Complex Platform
Another issue with Binance is that it is a rather complex platform. Navigating it can be quite a confusing experience for many people, particularly beginners.
KYC-Compliance
While we did enumerate Binance’s adherence to KYC norms as a plus point, it can be a disadvantage for users who want privacy and anonymity.
Security Breaches
Despite claiming to put customers’ security first, Binance has suffered from hacking attacks over the years, two being in 2022 itself. This has certainly eroded some faith in the security of the platform.
Account Management
Opening a Binance account is quite a straightforward process. Follow the given steps to make a Binance account:
Step 1
Go to the Binance website and click on the “Get Started” button on the left-hand side. You can either sign up with your e-mail id and phone number or via your Google or Apple account.
Step 2
Since Binance is KYC-compliant, you have to verify your ID upon registration. The KYC process is split into three tiers- Verified, Verified Plus, and a custom limit available on request.
Though KYC regulations vary from country to country, the general process involves submitting a passport, driver’s license, or any other valid government-issued ID. A real-time Liveness Check is conducted to check the user’s face against the documents they provided.
World-Check which is the largest database of high-risk, sanctioned, and politically exposed individuals, is used to cross-check and verify the user’s identity.
Step 3
Next, you have to enable 2-factor authentication for added security. In the Profile Tab, click on security and then enable the Binance/Google Authenticator. Next, link your payment method to your account. If you already hold some crypto, you can transfer it to your Binance wallet.
You can use your bank account or debit/credit card to transfer funds into your Binance account.
Step 4
Now, you are all set to start trading on Binance. To make deposits or withdrawals, go to the Wallet Tab on the right side of your profile. Click on Overview, select deposit/withdraw and then choose the cryptocurrency you want to deposit/withdraw.
Along with the website and Binance desktop app, you can also access your Binance account from your mobile by downloading the app from the Google Play Store(for Android) or the Apple Store(for iOS). Once you log in, you can use your dashboard to view charts, market trends, and your current and past trades.
Cryptocurrencies Available on Binance Exchange
Binance offers more than 350 cryptocurrencies to its users globally. It carries all types of cryptocurrencies- from popular currencies like Bitcoin(BTC) and Ether(ETH) to Stablecoins like Tether and gaming tokens like Axie Infinity(AXS) and Decentraland(MANA). There is also the native Binance Coin(BNB) that powers the Binance Smart Chain.
Some cryptocurrencies which can be traded on Binance are:
- Bitcoin(BTC)
- Ethereum(ETH)
- Binance Coin(BNB)
- Ripple(XRP)
- Solana(SOL)
- Tether(USDT)
- Polygon(MATIC)
- Cardano(ADA)
- Dogecoin(DOGE)
- Litecoin(LTC)
- Tron(TRX)
- Polkadot(DOT)
Note that Binance.US is different from the Binance platform which operates in the rest of the world. It hosts a lesser number of cryptocurrencies(about 130) compared to its global counterpart.
Fees charged by Binance Exchange
Binance generally has much lower transaction fees than other cryptocurrency exchanges. Though the final amount varies according to the transaction volume, it is on average equal to or less than 0.10%. Further, users can take advantage of various discounts and rebates if they pay for transactions with Binance Coin(BNB).
Spot Trading Fees
Trading fees are always charged on the asset received. For example, If you buy BTC/USDT, you pay in USDT. The fees for spot trading are different for different levels of accounts. A regular user pays a maker/taker fee of 0.10%/0.10% while a VIP 4 and above level account pays a maker/taker fee of 0.02%/0.04%.
Traders can get a 25% off on their spot trading fee if they use BNB to pay for transactions. This brings down the effective maker/taker fee to 0.075%/0.075% for a regular user and 0.0150%/0.0300% for VIP 4 and above accounts.
Options Trading
For Options Trading, Binance charges a maker/taker fee of 0.020%/0.020% for regular users on a 30-day Options Trade Volume of less than 1.5 million USDT.
When it comes to Options VIP, the maker/taker fee is 0.000%/ 0.015% for a 30-day options Trade Volume greater than 1.5 million USDT.
Note that the Options VIP Trade Volumes are reviewed every Monday. All subsequent fee adjustments for qualified VIPs are then made effective the same day.
P2P Transaction Fees
In the case of P2P transactions, there is no taker fee but only a maker fee is charged. When the fiat currency is USD, a maker fee of 0.35% is charged on BNB, BTC, BUSD, DAI, ETH, and USDT. For using the Euro, even the maker fee is 0.00%.
COIN-M Futures Trading Fees
When it comes to COIN-M Futures Trading, the maker and taker fee again differs according to the type of account and trading volume. For a regular user, this comes out to be a maker/taker fee of 0.0100%/0.0500% on a 30-day trade volume of less than 15 million BUSD. While for a VIP 9 Level account, the maker/taker fee is -0.0090%/0.0240%.
USD-M Futures Trading
On USD-M Futures Trading, the maker/taker fee is 0.0200%/0.0400% for USDT and 0.0120%/0.0300% for BUSD. Though with a 10% BNB deduction, it effectively comes down to 0.0180%/0.0360% for USDT and 0.0108%/0.0270% for BUSD.
On the other hand, on a VIP 9 account, there is no maker fee charged for USDT while the taker fee is 0.0170%. For BUSD, the maker/taker fee is -0.0100%/0.0230%. After the 10% BNB deduction, it comes to a taker fee of 0.0153% in USDT and a maker/taker fee of -0.0100%/0.0207% in BUSD.
How secure is Binance Exchange
Binance has time and again reiterated its commitment to implementing the best security practices on its platform. Towards that end, it has strict protocols and an extensive risk management system on both the platform level and the user level.
Binance and Platform Security
Since hot wallets are prone to hacking attempts, Binance keeps the majority of user funds and assets in cold storage. It also administers a multi-signature and threshold signature scheme(TSS) for the safety of user funds.
There is a risk management and real-time monitoring system in place. In case it suspects unusual activity, withdrawals are suspended for a minimum of 24-48 hours.
Like most leading exchanges, Binance is also KYC-compliant. The security of their personal data is a concern for all users. For this, Binance encrypts the data of its users in storage. Additionally, the data in transit is also end-to-end encrypted.
Binance and User-Level Security
Binance has a two-factor authentication(2FA) via SMS, e-mail, hardware, and app-based methods for sign-in.
There are opt-in security options such as IP and wallet address whitelisting, API access control, and device management for more advanced security.
Customers are also alerted via alerts, e-mails, and notifications in case of suspicious account activity. They can also restrict access control to give withdrawal access to only certain wallets or IP addresses.
The Story of the Binance exchange hacks
Despite seemingly robust security features, in practice, Binance has been at the receiving end of some major hacks. In December 2022, Binance paused withdrawals for a few hours following after DeFi staking and web platform Ankr suffered a hack. The developer’s private key was compromised and roughly $5 million worth of Binance Coin(BNB) was stolen.
Before that, it had suffered from a high-profile hack where a hacker exploited a vulnerability in the Binance Bridge. They managed to create one million BNB tokens twice(worth about $570 million) and sent those tokens to themselves.
To their credit, Binance authorities promptly addressed the issue. An update was released and the hackers’ accounts were frozen. To deal with future attacks, a new on-chain governance mechanism for the BNB Chain was introduced.
If we look further back, a large-scale security breach had also taken place in 2019 when hackers stole 7,000 bitcoins valued at $40 million at the time. Not only that, but some users’ two-factor authentication codes and API tokens were also stolen.
Besides that, Binance has run into legal trouble in a number of countries. The regulatory uncertainty surrounding the exchange has turned some users away from it.
Customer Support
Binance offers multiple options for customers to resolve their queries and get a seamless trading experience.
It has a comprehensive Frequently Asked Questions(FAQs) section. Users can find the relevant question and the Binance Bot will answer it.
There is also a live chat function where users can connect with a customer service agent. The 24/7 chat function is available in 17 languages.
Binance also has an active Twitter account, and users are encouraged to directly DM their complaints along with the case ID(if any) to the company.
Customer Reviews
Binance has a score of 2 out of 5 on Trustpilot with 4,040 reviews. On g2, it scored 3.9 out of 5 with 146 reviews. Most reviews praise the large number and variety of crypto available on the platform, its low cost, and its easy system for deposits and payments.
Binance is appreciated for the easy funding of accounts
Binance has easy payment and deposit options
A bad experience with customer service seems to be a shared experience with users. Many reviews complained of long wait times in the live chat, delays in resolving complaints, and vague terms of use for the platform.
Customers complain about bad customer service and vague terms of use
Dismissive customer service seems to be a common thread
Additionally, some users have also expressed apprehensions about the legal troubles that Binance has been embroiled in. Its reputation seems to have taken a hit with news about the platform’s money laundering and tax offenses. Binance’s refusal to ban Russian users after Russia’s invasion of Ukraine has not done its reputation any favors either.
Some customers believe Binance’s various scandals are a red flag
Binance FAQs
Is Binance Exchange good for beginners?
Binance is perhaps better suited for experienced traders due to its complex design. The sheer number of products and trading options available on the exchange can be confusing and overwhelming for beginners.
Is Binance Exchange a Chinese company?
Binance was founded by Changpeng Zhao, a Canadian citizen of Chinese descent. Though initially the platform was based in China, it moved out sometime before China’s ban on cryptocurrencies in 2017. Further, in a blog post in September 2022, CEO Zhao clarified that Binance is not a Chinese company as it was neither incorporated in China nor does it function like a Chinese company culturally.
Is Binance Exchange safer than Coinbase Exchange?
Both Binance and Coinbase are pretty secure exchanges though Coinbase has some additional security features that Binance doesn’t have. Both have a 2-factor authentication(2FA) system and cold storage facility available. Both Coinbase and Binance.US are FDIC-insured for USD balances but Coinbase also offers insurance on hot storage in case of security breaches on their end.
Additionally, Binance has run into regulatory troubles in many places. While Coinbase has also faced hacks, it has a better reputation compared to Binance. For beginners, Coinbase might be a better choice due to its robust security features.
The Bottom Line
The variety of products and services offered by Binance combined with extremely low trading fees has helped it amass millions of regular customers and become the largest crypto exchange in the world.
However, the sheer range of products and trading options available can be overwhelming for beginners. Binance is perhaps better suited for users who are tech-savvy and have experience with cryptocurrency trading.
Plus, Binance has increasingly come under the scanner in multiple countries over the years for financial offenses. Several countries have outright banned it or issued fines and limited its operations. The repeated hacks and scandals have become a cause for concern.
The main Binance platform is banned in the USA and though Binance.US is available, its features are limited and the number of cryptocurrencies available is quite low compared to the global platform. But there is no denying that the right trader can extract benefits from Binance but it is better to do due diligence and research before signing up for it.