What Is Binance?

Binance is a cryptocurrency exchange that is the largest exchange in the world in terms of daily cryptocurrency trading volume. The company was founded in 2017 and registered in the Cayman Islands.

What Is Binance

Binance was founded by Changpeng Zhao, a developer who previously developed high-frequency trading software. Binance was originally based in China but later moved its headquarters out of China following increased regulation of cryptocurrency by the Chinese government.

In 2021, Binance was investigated by the US Department of Justice and the Internal Revenue Service on charges of money laundering and tax misconduct. The UK Financial Conduct Authority has ordered Binance to cease all UK-regulated activity by June 2021.

Binance History

CEO Changpeng Zhao previously founded Fusion Systems in Shanghai in 2005; The company builds a high-frequency trading system for stockbrokers. He joined Blockchain.info in 2013 as the third member of the cryptocurrency wallet team. He also worked less than a year as CTO at OKCoin, a spot trading platform between fiat and digital assets.

The company was founded in China but moved its servers and headquarters from China to Japan before the Chinese government banned cryptocurrency trading in September 2017.

As of January 2018, it is the largest cryptocurrency exchange with a market cap of $1.3 billion, a title it retains until April 2021 despite competition from Coinbase, among others.

In March 2018, Binance announced its intention to open an office in Malta following stricter regulations in Japan and China. In April 2018, Binance signed a memorandum of understanding with the government of Bermuda. A few months later, a similar memorandum was signed with the Malta Stock Exchange to develop a security token trading platform.

In 2019, the company announced Binance Jersey, a separate entity from parent exchange Binance.com, which aims to expand its reach in Europe. The Jersey-based exchange offers fiat-to-cryptocurrency pairs including the euro and sterling.

In August 2018, Binance, along with three other major exchanges, raised $32 million for the stablecoin project. The idea of ​​stablecoins is to provide the well-known non-volatility cryptocurrency bitcoin and other popular digital assets.

In January 2019, Binance announced that it was partnering with Israel-based payment processor Simplex to enable the purchase of cryptocurrencies with debit and credit cards, including Visa and Mastercard. Purchases are subject to Simplex’s local banking policies and are limited to Bitcoin, Ethereum, Litecoin, and Ripple’s XRP.

On May 7, 2019, Binance announced that it was the victim of a “large-scale security breach” in which hackers stole 7,000 bitcoins, worth about $40 million at the time. Binance CEO Changpeng Zhao said the hackers “used a variety of techniques including phishing, viruses and other attacks” and “structured their transactions to bypass our existing security checks.” allow trading to continue. The site promises to reimburse customers through the Secure User Asset Fund (SAFU). Withdrawals continued until May 19.

In September 2019, the exchange began offering open futures contracts, allowing leverage of up to 125 times the contract value. In November 2019, Binance announced the acquisition of Indian bitcoin exchange WazirX, which became controversial in August 2022 when Binance founder Zhao said the deal was never signed.

On February 21, 2020, the Malta Financial Services Authority (MFSA) issued a public statement in response to media reports describing Binance as a “Malta-based” cryptocurrency company. The statement states that Binance is “not authorized by the MFSA to operate in the cryptocurrency space and is therefore not subject to MFSA oversight.” The MFSA added that it is “assessing whether Binance has activity in Malta that may fall outside the scope of regulatory oversight”.

On October 28, 2020, Forbes employees released leaked documents alleging that Binance and Changpeng Zhao created a complex corporate structure aimed at deliberately and covertly misleading United States regulators by cryptocurrency investors based in the country for profit.

Binance officially blocks access from IP addresses in the United States, but according to Forbes, “potential customers are taught how to circumvent geo-restrictions.”

In May 2021, it was reported that Binance was being investigated by the Internal Revenue Service and the United States Department of Justice on charges of money laundering and tax misconduct.

In February 2022, Binance took a $200 million stake in Forbes. In March 2022, in the midst of Russia’s 2022 invasion of Ukraine, Binance CEO Changpeng Zhao refused to ban users from Russia, citing “financial freedom.” Binance later softened their opposition to this measure, also citing their $10 million donation to humanitarian causes in Ukraine [28].

In April 2022, Reuters reported that in 2021, Binance exchanged information with Rosfinmonitoring about funds raised by the network of imprisoned Russian opposition leader Alexei Navalny.

On 27 May 2022, Binance announced its legal entity registration in Italy and plans to open an office and expand its local team in the region. CEO Changpeng Zhao also shared information about Binance’s listing with the French market regulator. The company is also seeking registration in other European countries such as Switzerland, Sweden, Spain, the Netherlands, Portugal and Austria.

On June 13, 2022, Binance announced that users will not be able to withdraw their funds held in Bitcoin (for an indefinite period of time) as the value of the cryptocurrency has plummeted. Bitcoin withdrawals have resumed 2 hours after the temporary suspension of Bitcoin withdrawals was announced