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Is Binance Safe?
Binance is one of the most famous and loved cryptocurrency exchanges, and rightfully so. It offers people a lot of choices, and it also has a high trading volume, not to mention a great reputation. At the same time, if you haven’t used a platform like this before, you may not trust it entirely, despite all the good reviews or comments you see online. So, you might be wondering “is Binance safe to use?” Learn everything you need to know in this article.
What Is Binance?
Binance is a cryptocurrency exchange where you have the chance to trade a lot of digital currencies. The platform has been around since 2017 and its brokerage services are offered all over the world. On Binance, you can purchase cryptocurrencies using bank transfers or credit/debit cards.
Even though it hasn’t been around for the longest time, Binance was successful in gaining a lot of popularity and reaching a significant amount of users. In fact, after only four years, Binance has over 100 million active users, and it is one of the largest exchanges out there.
Moreover, its trading volume is $2.4 trillion. Its services aren’t limited to brokerage and exchange ones, though. There are several other features you can enjoy with Binance, such as a digital asset debit card that is backed by Visa, a cryptocurrency loan facility, and a cryptocurrency savings account. The latter allows you to get some interest in the digital currency investments you’ve made.
Trust Wallet is also backed by Binance, so if you need a safe place to store your cryptocurrencies, you can use it. Trust Wallet is available through an Android or iOS application.
Is Binance Safe?
Your main concern may be whether Binance is a safe exchange to use or not. Especially when you are new to cryptocurrencies, you may not know which exchanges to trust or not. Besides, not every exchange is safe, so you want to ensure you go for a secure one so that you don’t risk your money. Here are some things that may help you see how safe Binance is and then decide if you should use it to join the crypto market.
How Does Binance Protect Your Money?
Binance has a secure asset fund for its users to help protect their money. Also called SAFU for short, this fund keeps a portion of every fee taken by Binance in case a financial loss happens. The SAFU was established in 2018 and it will allow users to get refunded if any money gets lost because of Binance.
What’s more, there are several other features put in place to make sure your funds are always protected. Address whitelisting and device restrictions were added, and you also have two-factor authentication. So, it should be impossible for anyone to access your Binance funds.
How Is Binance Regulated and Insured?
At the moment, Binance is being reviewed by most governments in the world to figure out if regulation is necessary. The two authorities that spoke about interacting with Binance were the FCA from the United Kingdom and the SEC from the United States of America.
Also, the U.S. dollars placed in Binance are insured by the FDIC as the money is stored in a legitimate bank. When you convert your money into cryptocurrency or token, though, it is not insured anymore. This applies to every single country – therefore, storing your official currencies with Binance should be safe most of the time. When the amount gets into the crypto market, the Binance policies will have to protect the investments.
Has Binance Had Any Security Compromises?
One security compromise happened back in April 2019. In this incident, hackers ended up taking about 40 million dollars in funds from the platform. What makes things even worse is that they did not limit themselves to funds – they also stole security information from people’s accounts.
To make sure that people do not lose any funds, Binance had to cover the entire stolen amount out of their pocket. Since then, no other security compromise has been reported by Binance. Furthermore, they also declared they found the hackers who caused the problem in 2019.
Binance has been mostly safe for people’s information and funds, and the fact that they covered the losses themselves says a lot about them.
On top of that, according to Zhao, the transaction was only around 2% of the total Bitcoin holdings of Binance. They ordered a “thorough security review” as well. Zhao also tweeted “Not the best of days, but we will stay transparent.”
What Are Binance’s Security Rules?
Most countries in the world are able to use Binance, but there are a few exceptions. At first, the United States did not want its citizens to use Binance for trading, not until they released the U.S. version of the platform, Binance U.S.
This particular version of Binance is registered with the government. However, it is also being investigated for tax evasion and money laundering. There were some documents leaked last October saying that Binance actually worked on a particular corporate structure that would deceive the regulators of the United States. This would allow them to make a profit off investors.
That’s not all, though. In the U.K., the FCA had to force Binance to stop trading currency in the country, which may also be related to some pending investigations related to tax evasion and money laundering.
Until they can regulate cryptocurrency trading on Binance properly, Ontario Canada, Malaysia, Thailand, and Japan are also trying to prevent Binance trades. Binance was not silent – they said that they are trying to make the platform more accessible to people all over the world and working on their system. As everyone can imagine, though, there are some legal obstacles they have to overcome before that happens.
Pros and Cons of Binance
Just like any other cryptocurrency exchange in the world, Binance has some pros and cons. Here is what you can expect in this regard:
- Its mobile app is very good
- There are a lot of trading pairs supported
- Bank accounts and credit/debit cards are accepted
- It has over 100 million users, making it one of the largest cryptocurrency exchanges in the industry
- Its commission rate is low
- The platform is not regulated in the UK and many other locations
- It only offers stocks on crypto, but not on other traditional assets
- It doesn’t allow you to use PayPal or other e-wallets
- There are trading instruments that are not available to traders from all countries
- With a credit or debit card, it charges you a certain percentage if you want to purchase crypto
- It is under investigation by the FCA and different other financial bodies
- How to Make Money with Cryptocurrency
- How to Withdraw from Binance
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- How to Transfer from Coinbase to Binance
- How Does Cryptocurrency Gain Value?
- How to Read Crypto Charts
So, is Binance safe? Binance does a lot to provide safety for its users, such as implementing 2-factor authentication among other things. Not to mention that they are open to paying people out of their pocket if hackers somehow get the upper hand. However, Binance still carries some risk just like any other exchange. Using it with caution is the best thing. Having a crypto wallet to store your funds can increase security.