Binance reliability & security
Are you wondering if it is safe to invest with Binance? In this article, we examine how reliable Binance is, so you can make an informed decision!
Summary: can Binance be trusted?
I have examined Binance extensively and they clearly do everything they can to secure customers' cryptos as best as possible. In the rest of this article, we will discuss why Binance is a reliable crypto exchange.
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Who is behind Binance?
At the time of writing, Binance is the largest crypto exchange in the world. The company was founded in 2017 in China by Changpeng Zhao, but moved to Japan due to China's ban on crypto trading.
Due to rapidly changing legislation, Binance then moved to Malta and Jersey. Since Binance operates internationally, it is sometimes difficult to determine where they are based. This is easier with Bitvavo, for example, whose headquarters are located in Amsterdam. The lack of a central office can make it harder to resolve complaints via a third party.
Binance hack: insured assets
In 2019, a large-scale hack took place on Binance where hackers stole 7,000 Bitcoin worth $40 million at the time. A good sign for the reliability is that Binance compensated all customers.
They compensated users by using their Secure Asset Fund for Users (SAFU). Binance constantly deposits money in this fund, which they use when customers lose funds due to a hack. The question remains, however, whether in case of a large hack, they have enough capacity to repay all users.
Still, the fact that they have refunded customers after the hack shows that Binance is a reliable and honest party. You can protect yourself by transferring a part of your crypto assets to a hardware wallet. If the crypto exchange is unexpectedly hacked, you will not lose all your cryptocurrencies.
Another positive point for the security of Binance is that you can secure your account with extra measurements. By using these measurements, you greatly reduce the chance of a hack.
The following security measures are available on Binance:
- You can secure your account with a physical security key such as YubiKey.
- You can use 2FA with, for example, Google Authenticator.
- Furthermore, you can secure your account by confirming your mobile number and email
- By using an anti-phishing code, you can avoid problems
- You can use a whitelist for withdrawing cryptos.
- You can keep track of the devices you use to log in to your account.
By taking sufficient measures yourself, you can prevent your account from being hacked. In this guide, we will explain in more detail how to secure your Binance account.
Lack of regulation
One disadvantage of Binance is its lack of regulation. Because Binance operates all over the world, it does not always succeed in following regulations.
As a result, countries are regularly banning Binance, which makes it more difficult for customers to use the platform. In Europe, for example, it will no longer be possible to transfer money to a bank account in 2021.
Binance tries to follow local laws, as they want to remain active everywhere. In America, for example, they have set up the separate Binance.us to be able to continue to serve American customers. However, the lack of compliance is clearly a negative point for Binance.
Conclusion: how reliable is Binance really?
Binance is the largest crypto exchange in the world: tens of billions of dollars’ worth of crypto are traded on the platform every day. The user experience is good, and you can trade at very low fees.
Due to the extensive security measures and the SAFU, you can safely get started on Binance. However, if you invest large amounts of money, it is still wise to store some of your cryptos on an offline wallet. This prevents you from losing a lot of money when something goes wrong on Binance.
It is a pity that the reputation of Binance's is regularly damaged; if the exchange manages to comply better with local regulations, its legitimacy would increase.
Do you want to read more about Binance?
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