Author: Geoffrey Ejiga
Anyone interested in cryptocurrency trading has probably heard of Binance Exchange, which is one of the largest crypto exchange platforms based on market cap.
But as more and more countries regulate Binance, you must be wondering if the platform is safe, with any specific benefits and drawbacks.
Let’s find out.
What is Binance, and How does it Work?
Binance is among the largest cryptocurrency exchange platforms boasting of low fees, access to over 600 cryptocurrencies, plus many advanced features suited for experienced investors.
Binance enables users to do the following:
- Trade, buy and sell cryptocurrency
- Passively earn income
- set recurring buys
- Trade NFTs (Non-Fungible Tokens)
- Get exposure to new cryptocurrencies by joining Binance’s Launchpool and Launchpad programs
- Access to advanced features like crypto derivative products, P2P trading, and limited orders
- Get portfolio insights with live tracking and alerts
- Access to tax reporting tools
However, Binance was banned in the United States in 2019 for regulatory reasons. The company responded by creating Binance.US as a separate but similar exchange that’s registered with the United States Financial Crimes Enforcement Network, which forces them to comply with U.S. laws.
But Binance.US isn’t available in New York, Hawaii, Texas, Idaho, Vermont, or Louisiana.
Other Binance Services
- Binance Earn: Investors can earn interest for depositing stablecoins with Binance Earn. Binance offers various interest rates and options depending on the coin and tenure.
- Binance Visa Card: Users can convert their cryptocurrency into fiat currency and pay for products and services with the Binance Visa Card.
- Binance Smart Pool: Miners can use Binance Smart Pool to switch between various cryptocurrencies, which enables them to optimize and multiply their income.
- Binance Pay: Binance Pay is a contactless and borderless cryptocurrency payment system made for shopping with crypto or sending to people worldwide.
- Binance NFT: With Binance NFT, you can seamlessly buy and sell NFTs on their platform.
- Binance Labs: Binance Labs is a technology incubator offering support to promising pre-ICO stage projects. The support includes funding for development and advisory resources.
- LaunchPad. Binance LaunchPad offers to host new and upcoming blockchain projects with API interfaces. Binance LaunchPad has launched 64 projects so far.
Is Binance Safe?
Binance is generally safe for trading cryptocurrencies, but the platform has been plagued by software hacks in the past.
But here are some key security features and measures offered by Binance:
- Binance stores most of the funds in offline cold storage.
- The company contributes 10% of all trading fees to a secure fund in case of any losses due to hacking.
- Binance uses 2FA (two-factor authentication), and withdrawal-whitelisting (to restrict withdrawals to pre-approved addresses).
Pros and Cons of Binance
- Low trading fees. At 0.1%, Binance’s trading fees are among the lowest compared to competitors.
- Binance offers over 600 cryptocurrencies
- Provides educational support with Binance Academy
- It comes with a Tax statement portal for preparing taxes
- Binance allows users to earn passive income on crypto assets. For example, you can earn up to 30% APR or more in some crypto staking programs. Or you can put assets in flexible savings accounts, which offer lower but more consistent rates.
- Not fully available in the United States: In 2019, Binance stopped accepting U.S. investors and created a different platform for them called Binance.US. The features of Binance and Binance.US are mostly the same, but Binance.US offers fewer cryptocurrencies on its platform.
- History of Regulatory Issues: Binance has and is still having regulatory issues in various parts of the world. Regulations have also caused Binance to restrict some accounts from withdrawing and depositing funds.
- Not entirely transparent with their security and user protection measures.
Binance Alternatives to Consider
Gemini is great if you’re new to cryptocurrency investing. The platform is extremely accessible, with a good range of educational resources, and cryptocurrency products. There’s also Gemini Earn which allows users to earn interest on their assets.
SoFi is for investors looking to diversify their portfolios by including stocks. SoFi offers cryptocurrencies and ETFs, fractional shares, and other products.
Binance’s low trading fees are among its most impressive attribute. The platform offers many other useful services like Binance Earn, Binance Pay, Binance NFT, Binance Visa Card, and more.
However, U.S citizens are restricted to Binance.US, which is a similar but limited version of the main platform.