What is Binance?

What is Binance?

Binance is the world’s largest cryptocurrency exchange in terms of daily trading volume, where users can buy, sell, trade and stake a wide variety of cryptocurrencies. 

Since its establishment in 2017 by Changpeng Zhao, commonly known as CZ, both Binance and its founder quickly grew to play an enormous role in the development of the cryptocurrency market and its culture. Despite CZ’s later criminal conviction and resignation as Binance CEO, the company remains at the center stage of the crypto world.

What services does Binance offer?

Binance offers a wide range of cryptocurrency trading and staking services to its users. The exchange provides markets for spot trading, allowing users to trade a variety of cryptocurrencies directly, with options for margin, futures and options trading. 

Other financial products include Binance Earn, where users can earn interest through savings, staking and other yield-generating products, as well as flexible and fixed-term crypto savings accounts. Binance also features fiat on-ramps allowing users to purchase crypto directly with a selection of typical fiat options, like bank transfers or credit cards, depending on jurisdiction. The Binance Launchpad platform supports new token launches and Initial Exchange Offerings (IEOs).

Binance Smart Chain (BSC) supports a number of decentralized finance (DeFi) services and applications, while Binance DEX facilitates peer-to-peer trading. The Binance NFT marketplace allows users to create, buy, and sell non-fungible tokens.

Additional services include Binance Academy, which offers educational resources on blockchain and cryptocurrency, and Binance Labs, which focuses on investments and support for blockchain startups. Binance Charity leverages blockchain for philanthropic initiatives, and Binance Cloud provides infrastructure solutions for launching digital asset exchanges.

What’s required for a Binance account?

To open a Binance account, the following is required:

  • To be at least 18 years old (this can vary depending on jurisdiction)
  • Email address or mobile phone number
  • Identity verification or Know-Your-Customer  (KYC), which can include providing personal information, a photo of valid ID (passport, driver's license, or government-issued ID), and a selfie. Address verification is also required in certain jurisdictions

Additionally, prospective users can add payment methods to facilitate the purchase of crypto with fiat directly through Binance. Two-factor identification (2FA) can also be enabled for additional security.

What fees does Binance charge?

Binance accounts are free and no fees are charged for depositing or storing crypto. For fiat deposits, the fees depend on the method and currency used. Some methods may incur a fee, while others might be free.

Crypto withdrawal fees are dynamic and adjusted based on blockchain network status and, and also change depending on the crypto being withdrawn.

For spot and margin trades, Binance starts with a base rate of 0.1% per trade, but offers incremental tiers of discounts, dubbed (VIP status), depending on the users holdings of BNB or previous 30-day trading volume.

Futures traders pay lower fees, based on whether they provide liquidity (makers) or take liquidity (takers). The maker fee starts at 0.02% and is also discounted based on the user’s VIP status. Similarly, the taker fee starts at 0.05% and receives incremental discounts based on VIP status.

What's the difference between BNB and Binance Smart Chain?

BNB and Binance Smart Chain (BSC) are integral parts of the Binance ecosystem, but they serve different purposes and have distinct functionalities.

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BNB was launched in 2017, initially as an ERC-20 token on the Ethereum blockchain during Binance’s Initial Coin Offering (ICO), but later migrated to Binance’s own blockchain. BNB is primarily used to pay for transaction fees on the Binance exchange. Users can get discounts on trading fees when using BNB. Holding BNB also allows users access to exclusive token sales for projects on Binance’s launchpad.

BSC, however, is a blockchain network designed to run smart contract-based applications. It provides the capability to create decentralized applications and digital assets on its platform. BSC supports an ecosystem for decentralized finance, including decentralized exchanges, yield farming, and staking protocols.

BSC operates alongside Binance Chain, allowing users to transfer assets between the two blockchains seamlessly.

How Binance has grown over the years

In July 2017, Binance was founded by CZ after raising $15 million through an initial coin offering for its native token BNB. By September 2017, Binance officially launched its trading platform, quickly gaining popularity due to its wide selection of cryptocurrencies and low trading fees.

In January 2018, Binance became the world's largest cryptocurrency exchange by trading volume, a position it maintains today.

Of particular note is Binance’s share of Asia-based customer exchange volume:

Fast forward to September 2019, Binance launched Binance US to comply with U.S. regulations, expanding its presence in the American market. In April 2020, Binance acquired CoinMarketCap, one of the most-referenced cryptocurrency data websites. Later that year, in September 2020, Binance launched Binance Smart Chain, a blockchain network designed to enable smart contracts and decentralized applications. 

By January 2021, Binance reached a milestone of $1 trillion in trading volume in just one month, showcasing its massive growth and market influence. In June 2021, Binance launched an NFT marketplace, allowing users to create, buy, and sell non-fungible tokens (NFTs), tapping into the burgeoning NFT market.

Binance’s regulatory battles

Legal troubles for Binance and its founder and CEO Chanpeng Zhao began in March 2021, when the Commodity Futures Trading Commission (CFTC) reportedly started investigating Binance for potentially offering crypto derivatives to U.S. customers without proper registration. No charges were laid at this time.

By March 2023, the CFTC formally sued the cryptocurrency exchange for violating federal laws and not registering the exchange in the United States. In June 2023, the SEC filed formal charges against Binance and CZ. These charges included allegations of wash trading, intermingling customer funds with corporate funds, and allowing U.S. customers to trade on Binance despite previous assurances that these customers would be restricted from the platform.

The turning point came on Nov. 14, 2023, when the DOJ filed indictments against Binance and CZ. It was later revealed that CZ and Binance had entered a guilty plea with authorities. This settlement included a massive $4.3 billion fine, and as part of the plea agreement, CZ stepped down from his role as CEO of Binance, with Richard Teng taking over.

The settlements marked a pivotal moment for the cryptocurrency industry, ending an era of CZ as one of the top and most visible players in the space. CZ was later sentenced to a four-month prison term plus a $50 million fine.


Disclaimer: This article was produced with the assistance of OpenAI’s ChatGPT 3.5/4 and reviewed and edited by our editorial team.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Jordan Leech is a Berlin-based Editorial Intern at The Block. He has worked for several years as a broadcast journalist, camera operator, and producer before aiming to get established working in the crypto industry. Jordan holds a degree in Philosophy and Political Science from the University of Guelph and is an avid photographer and traveller in his free time.