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Overview
Binance is a world-leading cryptocurrency exchange that was founded in July 2017 after a successful ICO that raised $15 million. The exchange has attracted millions of users in multiple countries across the world and is often applauded in exchange reviews and social media as the best trading platform. Binance is widely regarded as one of the best crypto exchanges with the largest selections of cryptocurrencies and trading pairs available to exchange.
Routinely considered an industry leading in every aspect of the cryptocurrency market, Binance controls two of the top ten largest cryptocurrencies in the world between its native BNB token and USD-based BUSD stablecoin that live on top of the Binance Smart Chain ledger. Binance puts up more than 50% of both spot and futures volumes, way ahead of any of its competitors in terms of amount traded.
The exchange is led by a group of Chinese nationals with extensive executive leadership experience in traditional finance. The co-founder and CEO of Binance is Changpeng Zhao (CZ), originally a Chinese-Canadian businessman with experience at the Tokyo Stock Exchange, Bloomberg Tradebook, Fusion Systems, OKcoin. CZ runs Binance along with Yi He (co-founder and CMO who founded OKcoin) and Wei Zhou (CFO with experience including Tai Pan Trading managing director, INTAC International CEO, Zhaopin CFO, Charm Communications CFO before Binance).
Binance is one of the world's most secure and trustworthy exchanges that features multiple layers of 'bank-like' security measures and management protocols to ensure the 100% safety of its customer's personal information and funds. Examples of the technologies used to provide a safe and secure trading environment for users who decide to leave their coins on the exchange include cold wallet storage and two-factor authentication. Following the collapse of rival exchange FTX, Binance CEO CZ has also publicly announced that Binance plans to post routine proof-of-reserves in order to provide precise transparency of the exchange’s holdings and usage of funds. The motivation for this move is to increase consumer confidence after it was revealed that FTX had been utilizing consumer funds to conduct risky trading bets that resulted in the loss of $10 billion in liquidity. CZ is betting that posting reserves to the public will allow users to confidently maintain their funds on Binance for trading, swapping, staking, and other utilities.
Binance also manages its SAFU fund, which is an emergency insurance fund in case of large hacks or to prevent socializing large liquidations to be able to compensate for losses. In 2017, Binance was the subject of a major cryptocurrency theft and security breach. Hackers compromised the security systems using phishing emails, viruses, and other attacks. 7,000 Bitcoins (approximately USD 40 million at the time) were stolen and some users' two-factor authentication codes and API tokens. Binance reimbursed all of the user's lost money to cover the security breach using its emergency insurance fund. Additionally, in 2019 hackers stole $40 million in bitcoin from Binance, which the company also said they would cover from their emergency fund.
Binance is a globally operating exchange with services in over 200 countries via the main Binance website or affiliated partners. However, similar to that of FTX, Binance does not have the ability to operate within the United States. Instead, Binance US offers services to US citizens as an entirely separate company and exchange. Binance US does not have futures trading and offers substantially less trading pairs than that of the full Binance website. Binance has been known to cater to retail traders and investors but has announced in 2022 its intentions to upgrade its existing services to improve the experience for institutional investors and VIP clientele. Binance reportedly has a global user base of over 90 million customers.
Products and Offerings
Binance is ranked the number one exchange in the world for overall traffic, liquidity, trading volumes, and consumer confidence within the spot trading and derivatives markets as of Q4 2022. The exchange offers a massive 1,400+ trading pairs against fiat currencies, altcoins, and stablecoins. Binance has also very much been at the forefront of innovation in the crypto exchange industry. Many of their innovations have been taken over by most other exchanges, such as exchange tokens, launchpads (IEO’s), and exchange staking of altcoins.
Binance has a wide variety of available products to consumers, including major categories such as:
- Spot Trading
- Derivatives
- Savings
- Staking Tools
- Liquidity Pools
- Crypto Loans
Spot trading on Binance gives users access to different trading interfaces with varying complexity to service everyone from beginners to professional traders. This is shown via its Basic, Classic, and Advanced spot trading interfaces. Traders also have access to margin options, Over-the-counter (OTC) trades, and Peer to Peer (P2P) transactions between individuals. In addition to spot trading markets, Binance has three main derivatives trading options that includes Perpetual futures, Quarterly futures, and Leveraged Tokens (hedged, leveraged futures basket). For specifics, per CoinGecko, Binance has more than 354 coins listed on its exchange as of 2023 within the 1,400+ trading pairs. Futures has a listed 279 pairs.
BNB and BUSD Tokens
Binance was initially financed via an initial coin offering (ICO) through its own BNB token, making it the first exchange to raise funding in such a way. Following this process, many other exchanges also adopted this methodology of raising funds and incentivizing investors. The BNB token itself offers many different utilities and advantages to Binance users, predominately in the discounted trading fees and different use cases the coin offers on the exchange itself (staking, yield farming, etc.). The BNB token serves as a base trading pair for a number of different tokens on the exchange.
Users can leverage the BNB token to lower transaction fees on the Binance platform. Spot trading has a set fee of 0.01% for both Makers and Takers. If investors choose to utilize the BNB token, there is a 25% discount of spot trading fees. Futures trading (via USDT or BUSD settlements) have varying fees:
- USDT: 0.02% Makers , 0.04% Takers
- USDT (paid in BNB): 0.018% Makers, 0.036% Takers
- BUSD: 0.012% Makers, 0.03% Takers
- BUSD (paid in BNB): 0.0108% Makers, 0.027% Takers
For futures trading that is settled in other cryptocurrencies, the following fees apply:
- Maker fee: 0.01%
- Taker fee: 0.05%
Team
Binance, with its incredible success, has promoted many of its team to celebrity status in the cryptocurrency space. Binance has over 8,276 employees in over 50 countries.
The top leadership is composed of Chinese nationals, generally with extensive executive leadership experience in traditional finance.
- Changpeng Zhao (CZ), co-founder and CEO: originally a Chinese-Canadian businessman with experience at the Tokyo Stock Exchange, Bloomberg Tradebook, Fusion Systems, OKcoin. Sold his home to buy Bitcoin in 2013.
- Yi He, co-founder, and CMO: a former Chinese Travel TV anchor who cofounded OKcoin and left for Yixia before cofounding Binance.
- Wei Zhou, CFO: former Tai Pan Trading managing director, INTAC International CEO, Zhaopin CFO, Charm Communications CFO before Binance.
As a private company, Binance is less transparent and forthcoming about its organizational chart, development team, and even its headquarters. The headquarters has moved in response to regulatory threats, first based in China, then Japan, Malta, and now unknown. There are also reports of Binance legally being headquartered in the Cayman Islands and Seychelles.
In 2021, Binance began a concerted effort aimed at hiring world-class compliance personnel with the likes of Jonathon Farnell, an ex-director of compliance at eToro, to oversee its Europe-based compliance operations. Binance also hired Manuel Alvarez, former California Department of Financial Protection and Innovation Head, as chief administrative officer position of Binance.US.
Matthew Roszak, Roger Ver of Bitcoin.com, and Da Hongfei of NEO were notable ICO participants.
New Hires
- Jack Jakubeck- Head of Intelligence and Investigations for Asia-Pacific.
- Joshua Eaton- Deputy General Counsel.
- Seth Levy- Head of Market Surveillance.
- Steven McWhirter- Director of Regulatory Policy.
- Chagri Poyraz- Global Head of Sanctions.
- Rohit- Chief Technology Officer.
- Mayur Kamat- Head of Product.
- Amjad Qaqish- Director of Global Suspicious Activity Report (SAR) Reporting.
- Martin Bruncko- Executive Vice President for Europe.
- Patrick Hillmann- Chief Communications Officer.
- Mark McGinness- Chief Regulatory Liaison Officer.
- Tigran Gambaryan- Vice President of Global Intelligence and Investigations.
- Matthew Price- Senior Director of Investigations.
- Zane Wong- Director of KYC Compliance.
