Binance Exchange

What is Binance Exchange?

Binance is a bitcoin and altcoin crypto exchange that is the largest in the world in terms of daily cryptocurrency trading volume. It was founded in 2017 and is officially Cayman Islands-registered.

Binance was established by Changpeng Zhao, a developer who had created the initial high-frequency trading software. Binance moved its corporate offices from its original location in China shortly before that nation's government began to regulate cryptocurrency trading. Binance had to relocate several times to different locations outside China due to certain regulations in respective locations before becoming a "headquarter-less" company.

In 2021, the US Justice Department and the Internal Revenue Service began investigating allegations that Binance had participated in tax evasion and money laundering. The Financial Conduct Authority ordered Binance to cease all authorized operations in the UK in June 2021.

Understanding the Binance Exchange

The Binance exchange is renowned for trading crypto-to-crypto or two-bitcoin pairings and has gone popularity due to its lowest transaction fees among several cryptocurrency exchanges. Discounts are also given to customers who pay with the native BNB cryptocurrency tokens, and the product has a high liquidity level too. With a processing throughput of over 1.4 million requests per second and a multi-tier, multi-clustered design that meets the highest security and safety standards, Binance provides exceptional processing efficiency.

Trade is available for more than 600 different digital currencies, notably bitcoin, Ethereum, litecoin, and the company's native BNB coins.

Trading on Binance

Binance provides tools for trade, listing, funding, de-listing, and cash withdrawals, similar to other cryptocurrency exchanges. Binance is a platform that cryptocurrency enthusiasts may use to launch their coins and generate capital through ICOs (Initial Coin Offerings).

Many investors and participants use Binance to trade and invest in different cryptocurrencies. Users can only start trading if they meet the necessary KYC requirements. By transferring cryptocurrency assets to the public wallet address supplied by Binance, users who establish a trading account may start trading. The Binance exchange provides three fundamental trading orders, i.e. limit, business, and stop-limit. Only the trader-specified limit price may be used to fulfil limit orders. Market orders are executed promptly and at the best available rate. Stop-limit orders become effective only when the price crosses a specific threshold.

For crypto derivatives, particularly futures contracts, Binance offers an additional four order types. These trade orders consist of the following:

1. Market halt order
2. Ordering a trailing stop
3. Post-only order
4. Limit TP/SL order

However, a withdrawal transaction fee varies depending on the bitcoin and the sum.

Other Services of Binance

Binance provides other tools, networks, and services besides exchange-specific offerings.

A way to stake or earn interest on crypto assets placed with the exchange is done through Binance Earn. The exchange provides investors with various options and interest rates for currencies depending on the coin and the duration.

Customers may use a Binance Visa Card to convert their bitcoin into fiat money, which can subsequently be used to make transactions. The conversion does not include any administrative costs. However, there are third-party costs in the form of payment technology fees.

Binance Labs is a blockchain-based incubator founded by Binance that supports promising pre-ICO stage entrepreneurs. By July 2022, 64 projects had already been started.

In July 2017, Binance utilized an ICO to launch the Binance Coin (BNB), a cryptocurrency. As of July 2022, BNB's market worth exceeded $38.8 billion.

Binance Coin (BNB)

The internal coin of the platform is called Binance Coin (BNB). On the Binance exchange, it is employed to ease cryptocurrency trading. In July 2017, the currency was introduced via an Initial Coin Offering (ICO). All ICO participants jointly received 100 million BNB tokens from Binance, while angel investors received 20 million BNB tickets and the founding team received 80 million BNB tokens.

Around one-third of the money raised through the ICO was used to develop the Binance platform and make essential changes to the Binance ecosystem. However, about half of the money was used to simultaneously brand and advertise Binance.

At first, Binance Coin ran on the Ethereum network and followed the ERC 20 standard. However, Binance Coin soon took the position of the native coin of the BNB Chain in 2019. In July 2022, one BNB was worth around $237. With a market valuation of nearly $3.9 billion, it ranks as the sixth most expensive blockchain-based coin.

BUSD

Binance introduced BUSD, often known as BinanceUSD, which is a stablecoin backed by the US dollar. It is believed to be backed 1:1 by a reserve of US dollars and was created by Binance in partnership with Paxos, the token's issuer. Most Paxos' reserves are held in US Treasury securities; a small percentage of cash is held in US bank accounts. BUSD is created natively by Paxos on the Ethereum network. Binance releases Binance-Peg BUSD in an equivalent amount to the reserve kept in the smart contract after safeguarding the original ERC-20 BUSD in the Ethereum Blockchain's smart contract.

BUSD is a widely used stablecoin with the third-largest market value after USDT (USD Tether) and USDC (USD Coin).

Legal Status

United States

The United States imposed a regulatory ban on Binance in 2019. In response, Binance and other stakeholders established Binance.US, a special exchange designed to adhere to all pertinent US laws. The US edition's features and appearance are strikingly identical to the global version. Nevertheless, six states have laws against it. The US Justice Department and the Internal Revenue Service investigated Binance for potential tax and money laundering offences, as shown in a May 2021 Bloomberg News report.

To determine if Binance's 2017 ICO of BNB tokens constituted an unlawful sale of securities, the US Securities and Exchange Commission began an inquiry against the business in June 2022.

United Kingdom

In June 2021, Binance received a directive from the Financial Conduct Association (FCA) of the United Kingdom to stop conducting any regulated business there. Beginning in January 2021, the FCA started requiring businesses dealing with cryptocurrency to register to comply with anti-money trafficking legislation. If Binance disobeys the stated rules, it will have to cease operations very soon.

Japan

On June 25, 2021, Binance received notification from Japan's Financial Services Agency that it was not permitted to conduct business in Japan. The FSA (Financial Services Agency) has already notified Binance once before. On March 23, 2018, a similar word of warning was issued.

India

In August 2022, the Binance exchange, run by WazirX, had its assets seized by India's Enforcement Directorate as part of a money laundering investigation. CEO Zhao was very clear after the occurrence that he never owned WazirX or possessed any shares of Zanmai Labs, a WazirX operating entity. The business, which operated as WazirX, also cited "a few issues" as the reason the acquisition was unsuccessful. However, WazirX co-founder Nischal Shetty disputed Zhao's claims, saying that Binance had acquired his company.