What is Binance?
Binance is the largest and perhaps most famous crypto exchange in the world. With more than 1,4000,000 transactions per second and a daily volume of 2 billion dollars, Binance is the most popular place to trade crypto. In this article, we examine what Binance is and we try to discover who runs the exchange.
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What is Binance?
Binance is primarily known as a crypto exchange, but has become much more than just a place to trade cryptos. Binance refers to itself as an ecosystem with all kinds of crypto related services:
- Binance: one of the largest and fastest crypto exchanges in the world
- Academy: the perfect place to learn more about cryptocurrencies
- Info: the Wikipedia of crypto, to which anyone can contribute.
- Labs: Binance is investing in promising blockchain projects.
- Launchpad: Binance uses this to bring crypto projects to life.
- Research: Analysts share their views on the crypto market.
- Trust Wallet: This is the official decentralized wallet of Binance.
- Binance chain: this is the (decentralized) blockchain of Binance
- Charity: the non-profit of Binance with a focus on using blockchain for good causes.
Binance is one of the most interesting platforms for crypto fanatics. On Binance, you can do much more than just trading cryptos. Therefore, there is no simple answer to the question ‘what is Binance?’
Binance is still the most popular crypto exchange. This is mainly because of its low costs (you never pay more than 0.1%) and the speed of its platform (1.4 million transactions per second are possible).
Who is behind Binance?
Binance operates in line with the philosophy behind the blockchain: they want to operate decentralized. Binance therefore does not have a permanent head office and switches countries regularly. I also examined their open career options and noticed that it is possible to work remotely in almost every job. This does make it a little more difficult to determine the structure of the company.
Changpeng Zhao from China founded Binance. However, the Chinese government was not a fan of the trading platform and the platform therefore decided to move to Japan. Meanwhile, Binance is located in the Cayman Islands, but you cannot just walk in.
What is the Binance Coin (BNB)?
Binance has also launched its own cryptocurrency: the Binance Coin. You can use the Binance Coin within Binance to pay the transaction costs. By using BNB, you will also receive an additional 25% discount on your transaction fees.
At launch, there were 20,000,000 coins available. Binance has issued these to raise money: this has allowed them to grow quickly. Binance burns half of these coins, so the value might increase.
Binance is gradually reducing the discount you receive with BNB. In the future, the possibilities of the Binance Coin should be further expanded. The price of BNB, like other cryptos, is very volatile and depends on developments in the crypto market and the popularity of Binance, among other things.
In the year 2017, Changpeng Zhao founded Binance. Before this, he had already founded Fusion Systems in 2005, a high-frequency trading system for brokers. He also participated in blockchain.info for the development of a cryptocurrency wallet and in OKCoin, which is a platform for trading fiat and other digital assets.
Binance was originally founded in China, but quickly moved to Japan in 2017 under pressure from the Chinese government.
Binance reached a milestone back in 2018, when it became the largest crypto exchange in terms of market capitalization. Until now, Binance has also remained the largest crypto exchange when you look at its volume.
Binance also decided to open several new offices in 2018, also to cope with increased regulation in Japan. Binance made various deals with Malta, Bermuda and Jersey with which the company aims to increase its global influence.
In the year 2018, Binance along with two other exchanges also managed to raise $32 million to start a stablecoin project. Stablecoins make it easier to trade cryptos in times of volatility.
In 2019, Binance began a partnership with Simplex, a payment provider based in Israel. Together, they offer the option to buy cryptos with a Visa credit card. Binance also introduced futures with leverage of up to 125 and Binance bought Indian crypto exchange WazirX.
2019 also brought bad news: in May this year, the exchange was hacked and over 7,000 bitcoin were stolen from users. These Bitcoins had a value of $40 million dollars at the time of the hack. The SAFU (Secure Assets Fund for Users) compensated users. Binance always deposits a part of the transaction fees in this fund to insure the crypto assets against hacks. In this article, you can read how to secure your account on Binance.
Despite the high Bitcoin price, 2020 was a problematic year for Binance. Binance got into conflicts with regulators frequently because they fail to keep up with local legislations.
For example, on 21 February 2020, the MFSA (Malta Financial Service Authority) released a report stating that Binance is not authorized to operate from Malta at all. The company is therefore not supervised, which entails risks.
There was also a lot of commotion in America: according to Forbes documents, Binance appeared to have misled the American government. Americans could still open accounts, as there was little control. The IRS and US Department of Justice investigate Binance for money laundering and tax evasion.
Regulation of Binance
Binance is growing fast: in just a few years, they have managed to attract a huge trading volume. This rapid growth naturally also comes with problems. It is therefore noticeable that not all countries are responding equally enthusiastically to Binance:
- America banned Binance because it did not comply with the regulations. Binance responded by opening Binance.us, which is available in most US states.
- Binance is also under surveillance in Japan: they have already received several warnings here.
- In England, the FCA has indicated in mid-2021 that it should stop offering its services.
- Thailand filled a criminal complaint against Binance for operating on the market without a licence.
- In the Netherlands, Binance has also received a warning from the Nederlandsche Bank.
Services offered by Binance
On Binanceblog.com, we offer information about the various services offered by Binance:
- Leveraged tokens: with Binance's leveraged tokens, you can benefit from leverage
- Binance lending: On Binance, you can borrow other cryptos using collateral.
- Binance saving: you can place your cryptos in a savings account on Binance.
- Binance futures: you can speculate on rising and falling prices on Binance.
- Binance Launchpad: The Launchpad allows you to join CIOs.
- Binance Launchpool: deploy your crypto to earn new crypto coins.
- Staking: put your cryptos to work and earn extra returns on Binance
- P2P trading: With P2P, you can buy crypto directly from other users.
- Binance NFT: trade online in digital, decentralized works of art.
- Binance visa card: with the Binance visa card, you can pay everywhere with crypto.
- Binance Chain wallet : the wallet from Binance for storing crypto.
- Binance Coin: Binance's own cryptocurrency.
- Binance referral: earn money by referring customers.
- Binance liquid swap: Binance has set up a decentralized exchange where you can trade even cheaper.