Exploring the World of Cryptocurrency Trading: Second Largest Cryptocurrency Exchange Binance

Binance Holdings Ltd., branded Binance, is one of the largest and most popular cryptocurrency exchanges in the world. Founded in 2017, Binance has quickly established itself as a leading player in the crypto market, offering a wide range of trading and investment options for its users.

At its core, Binance is a platform that enables users to buy, sell, and trade a variety of cryptocurrencies. The exchange supports a wide range of digital assets, including Bitcoin, Ethereum, Litecoin, and many others. Binance also offers margin trading, which allows users to trade with up to 125x leverage.

One of the key features of Binance is its advanced trading platform. The platform is designed to be user-friendly and intuitive, making it easy for anyone to trade, manage, and monitor their portfolios in real-time. Binance also provides a range of analytical tools and resources to help its users make informed investment decisions.

In addition to its trading capabilities, Binance also offers a range of other financial services, including lending and borrowing, staking, and savings. The platform enables users to earn interest on their assets, lend and borrow funds, and access a range of investment opportunities.

Binance is a leading cryptocurrency exchange that offers a comprehensive range of trading and investment options for its users. With its advanced platform, comprehensive resources, and commitment to security, Binance provides a secure and reliable environment for traders and investors to achieve their investment goals.

Binance coin (BNB)

The company has launched two cryptocurrencies which it developed itself: Binance Coin (BNB), and BinanceUSD (BUSD). BNB launched July 2017, which started as an Ethereum token and later moved to Binance Smart Chain (BSC), launched September 2020. BSC later merged with the older Binance Chain and was rebranded into BNB chain. BNB Chain operates using “Proof of Staked Authority”, a combination of proof of stake and proof of authority. It has 21 approved validators. As of 2021, Binance Coin was the cryptocurrency with the third highest market capitalization. Binance allows its users to pay fees on its exchange with BNB.

BNB Chain supports smart contracts and is compatible with the ethereum virtual machine (EVM).

There have been multiple criticisms of Binance Smart Chain concerning its level of centralisation, which had led to several exploits on the network.

BUSD

BUSD, or BinanceUSD is a US Dollar pegged stablecoin issued by Binance. According to Binance it is backed 1:1 by a reserve of US Dollars and was founded by them in partnership with Paxos who is the issuer of the token. Paxos holds the reserves only partially in cash deposited in their US bank accounts with the other part held in U.S. Treasuries. BUSD is natively issued on the Ethereum blockchain by Paxos. Binance creates Binance-Peg BUSD by locking the natively ERC-20 BUSD in a smart contract on the Ethereum Blockchain and issuing Binance-Peg BUSD equivalent to the amount held in reserve in the smart contract. Binance-Peg BUSD is native to BNB chain.

In January 2023, Bloomberg reported that Binance-Peg BUSD “was often undercollateralized between 2020 and 2021. On three separate occasions, the gap between reserves and supply surpassed $1 billion.” A Binance spokesperson said the “process of maintaining the backing … has not always been flawless” but “has been much improved with enhanced discrepancy checks.”

BUSD is a widely used stablecoin being the 3rd largest stablecoin by market capitalisation following USDT and USDC.

Binance History

In January 2018 Binance was the largest cryptocurrency exchange with a market capitalization of $1.3 billion, a title it had retained as late as April 2021, despite competition from Coinbase, among others.

In April 2018, Binance launched the Binance Charity Foundation. The charity’s goal is to support the advancement of blockchain-enabled philanthropy with a focus on third-world countries.

In July 2018, Binance acquired Trust Wallet, a decentralized cryptocurrency wallet for an undisclosed sum. Hovever, Binance, confirmed that the compensation is a mixture of cash, Binance stock, and a portion of its BNB token.

In August 2018, Binance along with three other big exchanges raised $32 million for a stablecoin project. The idea of stable coins is to provide a cryptocurrency without the notorious volatility of Bitcoin and other popular digital assets.

In January 2019, Binance announced that it had partnered with Israel-based payment processor Simplex to enable cryptocurrency purchases with debit and credit cards, including Visa and Mastercard. The purchases are subject to Simplex’s local bank policies and are limited to Bitcoin, Ethereum, Litecoin and Ripple’s XRP.

In September 2019, the exchange began offering perpetual futures contracts, allowing leverage as high as 125 times the value of the contracts. In November 2019, Binance announced it was acquiring Indian bitcoin exchange WazirX, which became disputed in August 2022 when Binance founder Zhao claimed the deal was never signed.

On 21 February 2020, the Malta Financial Services Authority (MFSA) issued a public statement responding to media reports referring to Binance as a ‘Malta-based’ cryptocurrency company. The statement noted that Binance “is not authorized by the MFSA to operate in the cryptocurrency sphere and is therefore not subject to regulatory oversight by the MFSA.” The MFSA added that it was “assessing if Binance has any activities in Malta which may not fall within the realm of regulatory oversight.”

In March 2020, Binance acquired CoinMarketCap. Although the price of the acquisition was not disclosed, it’s reported to be up to $400 million. CoinMarketCap was founded in 2013 and is one of the largest cryptocurrency online tracking tools.

On 28 October 2020, Forbes staff released leaked documents showing that Binance and Changpeng Zhao created an elaborate corporate structure designed to intentionally deceive United States regulators and secretly profit from cryptocurrency investors located in the country. Binance officially blocks access from IP addresses located in the United States, but “potential customers would be taught how to evade geographic restrictions”, Forbes claimed.

In May 2021 it was reported that Binance was under investigation by both the Internal Revenue Service and the United States Department of Justice on allegations of money laundering and tax offenses.

In February 2022, Binance took a $200 million stake in Forbes.

In March 2022, amidst the 2022 Russian invasion of Ukraine, Binance’s CEO Changpeng Zhao, refused to ban users from Russia, citing “financial freedom”. Binance later softened the tone of their opposition but not their policy, and also pointed to their donation of $10 million for humanitarian needs in Ukraine.

In April 2022, Reuters reported that, in 2021, Binance shared information with Rosfinmonitoring about funds raised by jailed Russian opposition leader Alexei Navalny’s network.

On 27 May 2022, Binance announced the registration of its legal entity in Italy, and has plans of opening offices and expanding the local team in the area. CEO Changpeng Zhao also shared information regarding Binance’s registration with France’s market regulator. The company is also seeking registration in more European countries, such as Switzerland, Sweden, Spain, Netherlands, Portugal and Austria.

On 13 June 2022 Binance announced that users would, for an unspecified period of time, be unable to withdraw their funds held in Bitcoin, as the value of cryptocurrencies suffered serious declines. Two hours after that announcement, Bitcoin withdrawals were allowed to resume.

Binance has a strong brand presence in Africa. Binance sponsored the Africa Cup of Nations in 2021. It is also taking crypto education to many countries on the continent.

Binance invested US$500 million towards the acquisition of Twitter by Elon Musk that completed in October 2022. Following the investment, the company announced the creation of a team to work on how blockchain and cryptocurrencies could be helpful to Twitter.

On 8 November 2022, Binance offered to buy rival cryptocurrency exchange FTX’s non-US operations (FTX.com) to help cover the latter’s liquidity crunch. Binance backed out of the deal the next day citing concerns about FTX’s business practices and investigations by US financial regulators.

On November 30, 2022, Binance purchased Sakura Exchange. The acquisition allowed Binance to re-enter the Japanese Crypto market.