Review of Binance's cryptocurrency exchange

Even if you haven't traded or bought your very first cryptocurrency yet, chances are you've heard of Binance.

The Malta-based cryptocurrency exchange is often considered one of the largest platforms in terms of daily trading volumes, especially as traders have access to over 555 crypto-crypto pairs.

In addition, with the increased possibility of depositing and withdrawing fiat money of the real world, it is likely that this platform will continue to develop.

If you are considering joining Binance for your cryptocurrency investment needs, then be sure to read our full review below first. We'll be covering everything you need to know.

What is Binance?

Launched in 2017, Binance is a trading platform that allows you to buy, sell and trade cryptocurrencies such as Bitcoin, Ethereum, Bitcoin Cash, and hundreds of others. Although the company is now headquartered on the European island of Malta, the project was founded by Chinese national Changpeng Zhao.

In just under a few years, Binance has become one of the largest cryptocurrency exchanges in the industry. In fact, it's not uncommon for the platform to facilitate over $2 billion in daily trading activity.

Until recently, Binance was primarily a crypto-crypto exchange, which means it had no involvement in fiat deposits or withdrawals. However, and as we will see below, the platform now offers limited support for deposits to bank accounts and credit cards.

Nonetheless, Binance is now a household name for a number of reasons. First of all, the platform offers a very extensive list of cryptographic currency pairs. Second, transaction fees are extremely low at Binance. While standard transaction fees average 0.1%, this figure can be further reduced for those who own the digital asset that owns the platform: BNB.

In addition to its trading platform, Binance has launched the world's first blockchain bank (in Malta). The platform has also signed an agreement with the Malta Stock Exchange to facilitate the trading of digital securities.

Binance is also known for its dedication to helping those in need. Thanks to its Binance Charity Foundation initiative, the platform has carried out a number of charitable projects. In particular, it recently launched a campaign to help Ugandan women suffering from poverty.

How does Binance work?

In its most basic form, Binance allows you to buy, sell and trade digital currencies like Bitcoin and Ethereum. In order to give you an overview of how the platform works, we've listed the main steps that you will need to follow to get started.

Step 1: Open an account

Go to the Binance home page and open an account. If you only plan to deposit and withdraw funds using cryptocurrencies, you only need to provide an email address.

Step 2: Configure two-factor authentication

In order to secure your account, Binance will ask you to set up two-factor authentication (2FA). This means that you will need to install an app like Google Authenticator on your phone. Thereafter, each time you want to log in or perform key account actions such as a withdrawal request, you will need to enter a unique code that can only be found on your phone.

Step 3: Make a deposit

Although a number of countries now allow you to use a credit card or bank account to deposit funds, we will assume that you are looking to make a deposit using a cryptocurrency.

If you wish to make a deposit in fiduciary currency, you need to go to the "Funds" section of your account and follow the instructions on the screen.

However, on the deposit page, you will need to scroll through the long list of supported cryptocurrencies and click on the one you want to deposit in Binance.

Copy the unique wallet address provided to you, and use it to transfer funds from your private wallet.

Step 4: Trading

Once your cryptocurrency deposit has been credited - which usually only takes 10-20 minutes, you're ready to start trading. Hover over the "Exchange" button at the top of the screen and choose whether you want the "Basic" or "Advanced" trading platform. If you're a beginner, choose the first one.

You now have access to over 555 pairs of cryptocurrencies. If the cryptocurrency that you want to buy isn't directly associated with the one you deposited, you will need to complete an additional transaction.

For example, if you deposited funds using Bitcoin Cash but are looking to buy a smaller cap ERC-20 token that is not paired with Bitcoin Cash, then you may need to first exchange it with Bitcoins or Ethereum.

When you complete your transaction, your newly purchased cryptocurrency will now be available in your Binance account. You can either keep it in your Binance account or withdraw it to an external wallet.

Binance also offers an API that allows you to connect your account to a number of trading robots and allow them to trade on your behalf, automating your strategy and profiting from the robot's trades.

What cryptocurrencies are supported by Binance?

As we noted earlier, one of the main things attracting cryptocurrency traders is that the platform has one of the largest lists of cryptocurrencies. While the main players - notably Bitcoin, Ethereum, Bitcoin Cash, Litecoin and EOS - are of course supported, Binance is also ideal for much smaller tokens.

Instead of listing all of the trading pairs that are available on Binance, we have listed the 164 individual cryptocurrencies that can currently be bought and sold on the platform.

How much does it cost to trade at Binance?

Although Binance offers a maker/taker fee structure, the standard trading fee you'll be charged is 0.1%. This fee will be charged each time you buy and sell a coin. If you are a market taker - which simply means that you are using the liquidity that is already available on the platform, then you can reduce this amount to 0.09% if you trade over 500 BTC (or the equivalent in cryptocurrencies) within a 30-day period.

The lowest fee available to market takers is 0.04%, although you need to trade at least 150,000 BTC in 1 month.

At the other end of the spectrum, market makers - who provide liquidity to the platform - also receive an initial commission of 0.1%. However, for transactions of over 150,000 BTC per month, this commission can be reduced to 0.02%.

Regardless of the amount of your trades, the fees charged by Binance are among the lowest available in the ​​cryptocurrency sector. In addition, you have the option of further reducing these costs by holding Binance's Proprietary Currency (BNB).

Reducing transaction fees via the BNB

If you have a BNB balance, you can use it to pay your trading fees. By doing so, you'll benefit from a 25% discount. So your standard trading fees of 0.1% are reduced to 0.075%.

The reduced fees available through the BNB will decrease over time. While they were previously at 50%, the next reduction will bring them down to 12.5%.

Are you eligible to trade with Binance?

Binance is a global cryptocurrency exchange that has traditionally welcomed traders from all countries. The main reason is that users trade encrypted products, so the regulations are somewhat unclear. This is especially true when you consider that new users are only required to provide an email address to get started.

However, the platform recently announced that it would restrict the use of its exchange to holders of American passports. The main reason is that Binance is looking to launch a stock market dedicated to American citizens that meets all regulatory requirements. Therefore, if you are from the United States and want to use Binance, you will probably have to wait for the launch of the national exchange.

Deposits, withdrawls and payments

Although Binance has always been known as a cryptocurrency exchange, the platform is now able to facilitate deposits and withdrawals of fiat currency. It is currently possible to perform these operations by credit card or by bank transfer. Not all sites are supported, so it's best to check this first.

Credit card

If you want to use a regular credit card to buy cryptocurrencies, you can now do so directly on the Binance website. Both Visa and MasterCard are accepted.

However, although payments can be accepted from credit cards of any currency, the use of currencies other than the US dollar or the euro may entail additional fees. In terms of standard processing fees, this represents a cost of 3.5% ($10 minimum). This is slightly lower than those of Coinbase, which charges 3.99%.

You can currently use your credit card to purchase the following cryptocurrencies:

• Bitcoin
• Ripple
• Binance Coin
• Ethereum
• Litecoin
• Bitcoin Cash ABC

Bank transfer

If you wish to deposit and withdraw funds by bank transfer, this can be done using the Binance Jersey platform. The currently supported countries are primarily the United Kingdom and those located in Europe, as well as a number of other jurisdictions such as Turkey, Singapore, Australia, New Zealand and the United Arab Emirates.

To deposit funds into your Binance account via bank transfer, you must specify the desired currency and the amount you wish to deposit. Binance will then provide you with details on the account to which you will make the transfer, as well as the reference number you must include in the transfer.

KYC is required for deposits and withdrawls made using Fiat currency

It is important to remember that Binance will ask you to go through a simple KYC (know your customer) process before it can accept your request to deposit using fiat currency. This is to ensure that Binance complies with all applicable anti-money laundering laws. This is particularly crucial for the exchange, as it seeks regulatory approval to launch an exchange in the United States.

To do this, you will first need to enter your full name, address, country of residence and date of birth. You will then be redirected to the platform's third party verification partner (NetVerify). To complete the KYC process, you will need to upload a copy of your government issued ID. It must be a driver's license, passport or national ID card.

Fund security at Binance

Binance offers a number of security measures to ensure that your funds remain safe from external threats. First of all, and as we already indicated in our step-by-step overview of account configuration, we advise you to install 2FA. This means that if a hacker doesn't have access to your mobile phone, he won't be able to access your Binance account.

In addition, if you try to connect from a device or an IP address that hasn't been used before on Binance, you will have to confirm it via your registered email account. You can also choose to receive email notifications when key account functions are performed, such as withdrawals.

Regardiing withdrawals: Binance recently introduced its "Address Whitelisting" feature. In general, you have the option of withdrawing your funds at any wallet address. However, if you configure the whitelist feature from your account, you can ensure that withdrawals can only be made to one address. You can of course change this option at any time, but you will have to go through a few additional security steps.

SAFU reserve fund

We really like the Secure Asset Fund for Users (SAFU) that Binance introduced in 2018. The SAFU function acts as a reserve fund in the event that the platform is hacked. The SAFU reserve fund is financed by taking 10% of all trading costs that Binance generates. If you take into account the multi-billion dollar trading volumes that the platform is used to, the fund represents a potentially huge amound of money.

As great as Binance's security features are, it's important to note that the platform was nevertheless hacked in May 2019. Malicious individuals were able to remotely steal a surplus of 7,000 Bitcoins, which at the time represented a market value of just over $40 million. The good news is that the platform used the aforementioned SAFU fund, which means that the Binance clients that would otherwise have been affected didn't lose any money.

Binance and regulation

In terms of local regulation, Binance is regulated in Malta under the Virtual Financial Assets act (VFA). Other than that, Binance is not licensed by any other regulatory bodies. However, this doesn't mean that the platform doesn't meet its obligations in terms of combating money laundering.

Rather, Binance requires that all clients who plan to use a fiat currency to deposit and withdraw funds go through the KYC process. Additionally, if you attempt to withdraw more than 2 BTCs in a 24-hour period, you will also need to go through a verification process.

It is also important to note that Binance is in the process of applying for regulatory approval in the United States to launch a fully authorised stock exchange for American citizens. This means that it will have to ensure that its regulatory efforts are tight if it wants to get approval.

Margin trading

Binance recently introduced margin trading in their platform. You should request a margin account if you are interested, which will include a liability release form indicating that you understand the risks that are involved.

You will then need to transfer your cryptocurrencies to your margin trading portfolio, which is basically used as collateral against the funds you intend to borrow. Binance will allow you to trade with a 3:1 leverage, which means that if you have 1 BTC, you can actually borrow 2 more BTC.

If you are engaged in margin trading and your margin balance falls below 3:1, Binance will contact you to inform you that a margin call is necessary to avoid liquidation. If your margin balance then drops to 1:1, Binance will be forced to close your trade, which means you will lose your guarantee.

Therefore, you should only use margin trading if you have a good understanding of the underlying risks.

Binance: The verdict?

In summary, it is easy to understand why Binance is now one of the world's biggest cryptocurrency exchanges. Thanks to very low brokerage fees, hundreds of cryptocurrency pairs, and improved security features, Binance is a great choice if you're looking for a trading platform.

In fact, it's amazing how quickly the platform has grown since its launch in 2017. Binance is already credited with billions of dollars in weekly transaction volumes.

It's also a good thing that the platform is now able to facilitate currency deposits and withdrawals. Although this feature is currently only available in a limited number of countries, it's likely that Binance will continue to roll out its credit card and bank transfer services over the next few months.