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Binance

From EverybodyWiki Bios & Wiki

Binance
ISIN🆔
Founded 📆2017
Founders 👔
Headquarters 🏙️,
Cayman Islands;[1] Mahé, Seychelles[citation needed]
Area served 🗺️
Global, except for the United States[1]
Key people
Changpeng Zhao (CEO)
Products 📟 Cryptocurrency exchange, cryptocurrencies
Members
Number of employees
🌐 Websitewww.binance.com
📇 Address
📞 telephone

Binance is a cryptocurrency exchange which is the largest exchange in the world in terms of daily trading volume of cryptocurrencies.[2] It was founded in 2017 and is registered in the Cayman Islands.

Binance was founded by Changpeng Zhao, a developer who had previously created high frequency trading software. Binance was initially based in China, but later moved its headquarters out of China following the Chinese government's increasing regulation of cryptocurrency.

In 2021, Binance was put under investigation by both the United States Department of Justice and Internal Revenue Service on allegations of money laundering and tax offenses.[3][4][5] The UK's Financial Conduct Authority ordered Binance to stop all regulated activity in the United Kingdom in June 2021.[6]

In 2021, Binance shared client data, including names and addresses, with the Russian government.[7]

History[edit]

5 years birthday Binance cake in Paris in July 2022.

CEO Changpeng Zhao had previously founded Fusion Systems in 2005 in Shanghai; the company built high-frequency trading systems for stockbrokers. In 2013, he joined Blockchain.info as the third member of the cryptocurrency wallet's team. He also worked at OKCoin as CTO for less than a year, a platform for spot trading between fiat and digital assets.[8]

The company was founded in China but moved its servers and headquarters out of China and into Japan in advance of the Chinese government ban on cryptocurrency trading in September 2017.[9]

In January 2018 it was the largest cryptocurrency exchange with a market capitalization of $1.3 billion,[10] a title it has retained as of April 2021, despite competition from Coinbase, among others.[11]

In March 2018, Binance announced its intentions to open an office in Malta after stricter regulations in Japan and China.[12] In April 2018, Binance signed a memorandum of understanding with the government of Bermuda.[13] Months later, a similar memorandum was signed with the Malta Stock Exchange to develop a platform for trading security tokens.[14] In 2019, company announced Binance Jersey, an independent entity from its parent Binance.com exchange, with the aim to expand its European influence. Jersey based exchange offers fiat-to-cryptocurrency pairs, including the Euro and the British pound.[15]

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.[16]

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.[17]

On 7 May 2019, Binance revealed that it had been the victim of a "large scale security breach" in which hackers had stolen 7,000 Bitcoin worth around U.S.$40 million at the time.[18] Binance CEO Changpeng Zhao said the hackers "used a variety of techniques, including phishing, viruses and other attacks" and structured their transaction "in a way that passed our existing security checks."[19] Binance halted further withdrawals and deposits but allowed trading to continue. The site pledged to reimburse customers through its "Secure Asset Fund for Users (SAFU)".[20][21] Withdrawals resumed by 19 May.[22]

In September 2019, the exchange began offering perpetual futures contracts, allowing leverage as high as 125 times the value of the contracts.[23] 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.[24]

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."[25]

In July 2020, Binance announced a "strategic partnership" with a Chinese state-owned enterprise under the State-owned Assets Supervision and Administration Commission of the State Council and that Binance had joined a group "aiming to facilitate" the Belt and Road Initiative.[26]

On 28 October 2020, Forbes staff released leaked documents alleging 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.[1] 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.[1]

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.[3][4][5]

In February 2022, Binance took a $200m stake in Forbes.[27]

In March 2022, amidst the 2022 Russian invasion of Ukraine, Binance's CEO Changpeng Zhao, refused to ban users from Russia, citing "financial freedom.".[28] Binance later softened their opposition to this measure, and also pointed to their donation of $10 million for humanitarian needs in Ukraine.[29]

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.[30]

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.[31]

On 13 June 2022 Binance announced that (for an unspecified time period) users would be unable to withdraw their funds held in Bitcoin, amid the background of major falls in the value of cryptocurrencies.[32] 2 hours after the announcing the temporarily suspension of bitcoin withdrawals, Bitcoin withdrawals were resumed.[33]

Cryptocurrencies[edit]

Throughout its history, the company has launched two cryptocurrencies which it developed itself: Binance Coin (BNB),[34] launched June 2017,[35] and Binance Smart Chain (BSC),[36] launched September 2020.[37] Binance Smart 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.[34] Binance allows its users to pay fees on its exchange with Binance Coin.[34]

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

Legal status[edit]

United States[edit]

In 2019, Binance was banned in the United States on regulatory grounds. In response, Binance and other investors opened Binance.US, a separate exchange registered with the United States Financial Crimes Enforcement Network and designed to comply with all applicable US laws.[38] The US variant has been praised for offering a very similar interface and feature set to its worldwide counterpart. However, it is banned in six states.[lower-alpha 1][40] In May 2021, Bloomberg News reported that Binance was under investigation by the United States Department of Justice and Internal Revenue Service for money-laundering and tax evasion.[41] In June 2022, the US Securities and Exchange commission launched an enquiry into Binance to determine if the company's 2017 ICO of BNB tokens amounted to an illegal sale of a security.[42]

United Kingdom[edit]

In June 2021, Binance was ordered by the UK's Financial Conduct Authority to stop all regulated activity in the United Kingdom.[43][44] In January 2021, the FCA began requiring firms dealing with cryptocurrency to register in order to comply with anti-money laundering rules. As Binance is not compliant with these rules, it is being forced to cease operations within the coming weeks.[citation needed][may be outdated as of January 2021]

Japan[edit]

On June 25, 2021, Japan's Financial Services Agency warned Binance that it was not registered to do business in Japan.[45] This was the second notice Binance received from the FSA. Previously, a similar warning was issued on March 23, 2018.[46]

France[edit]

In May 2022, Binance gained regulatory approval in France, allowing the company to provide digital asset services in the country. France is the first European country to give Binance regulatory approval.[47]

Germany[edit]

In April 2021, the Federal Financial Supervisory Authority in Germany warned that the company risked fines for not releasing an investor prospectus for the stock tokens it has issued.[48]

Thailand[edit]

Thailand's Securities and Exchange Commission filed a criminal complaint against Binance on July 2, 2021, "for commission of offence under the Emergency Decree on Digital Asset Business B.E. 2561 (2018)". Additionally, Thailand's SEC cited Binance for operating without a license, a violation of Section 26 of the Digital Asset Businesses Emergency Decree.[49]

Canada[edit]

On March 17, 2022, Binance has confirmed in an undertaking to the Ontario Securities Commission that it would stop opening new accounts and halting trading in existing accounts for users in Ontario.[50][51]

Netherlands[edit]

In April 2022, The Dutch central bank announced a $3.35 million fine for Binance due to offering services within the Netherlands without being registered in the country. The fine was issued to the company after an official warning was issued to the company during August 2021.[52]

India[edit]

In August 2022, India's Enforcement Directorate froze the assets of WazirX, an exchange owned by Binance, as part of a money laundering investigation.[53] Following the event, CEO Zhao clarified that they never owned WazirX or owned any equity in Zanmai Labs—the operating entity of WazirX—citing "a few issues" that prevented the completion of the acquisition. The co-founder of WazirX, Nischal Shetty, disputed Zhao's claims asserting that Binance had indeed acquired them.[54]

See also[edit]

Notes[edit]

  1. ↑ Hawaii, Idaho, Louisiana, New York, Texas, and Vermont.[39]

References[edit]

  1. ↑ 1.0 1.1 1.2 1.3 "Leaked 'Tai Chi' Document Reveals Binance's Elaborate Scheme To Evade Bitcoin Regulators". Forbes. 2020-10-28. Retrieved 2020-10-30.
  2. ↑ "Binance". Archived from the original on 14 May 2018. Unknown parameter |url-status= ignored (help)
  3. ↑ 3.0 3.1 "Crypto Exchange Binance Under IRS and DOJ Investigation". Daily Newsbrief.
  4. ↑ 4.0 4.1 "Binance Faces Probe by U.S. Money-Laundering and Tax Sleuths". Bloomberg.com. 2021-05-13. Archived from the original on 13 May 2021. Retrieved 2021-05-13. Unknown parameter |url-status= ignored (help)
  5. ↑ 5.0 5.1 "Binance under investigation by Justice Department, IRS - Bloomberg News". Reuters. 2021-05-13. Retrieved 2021-05-13.
  6. ↑ "Consumer warning on Binance Markets Limited and the Binance Group". fca.org.uk. 2021-06-26. Archived from the original on 26 June 2021. Retrieved 2021-12-08. Unknown parameter |url-status= ignored (help)
  7. ↑ Berwick, Angus (22 April 2022). "Special Report: How crypto giant Binance built ties to a Russian FSB-linked agency". Reuters. Retrieved 2022-04-22.
  8. ↑ Ambler, Pamela (7 February 2018). "From Zero To Crypto Billionaire In Under A Year: Meet The Founder Of Binance". Forbes.
  9. ↑ Xiao, Eva (30 November 2017). "Three months after launch, this unbanked crypto exchange made $7.5m in profit". Tech in Asia.
  10. ↑ Nakamura, Yuji; Lun, Haidi (2018-01-11). "World's Top-Ranked Crypto Exchange Adds 240,000 Users in One Hour". Bloomberg.com. Retrieved 2018-03-08.
  11. ↑ de la Merced, Michael J.; Karaian, Jason (2021-04-15). "What's next for Coinbase?". The New York Times. ISSN 0362-4331. Retrieved 2021-05-12.
  12. ↑ Nakamura, Yuji (2018-03-23). "World's Biggest Cryptocurrency Exchange Is Heading to Malta". Bloomberg. Retrieved 2018-03-24.
  13. ↑ "The Continuing Development Of A Fintech Ecosystem For Bermuda" (PDF). Ber News. 2018-04-27. Archived from the original (PDF) on 2019-01-19. Retrieved 2021-02-04. Unknown parameter |url-status= ignored (help)
  14. ↑ plc, Malta Stock Exchange. "MSE and Binance sign MoU". Malta Stock Exchange. Retrieved 19 January 2019.
  15. ↑ "Crypto Giant Binance to Offer Euro Trading Pairs This Year". Bloomberg. 2018-06-11. Retrieved 2018-06-14.
  16. ↑ "Binance and Other Crypto Exchanges Back $32 Million Stable Coin Project". Fortune. Retrieved 2018-08-30.
  17. ↑ Russell, Jon. "Binance now lets users buy crypto with a credit card". TechCrunch. Retrieved 31 January 2019.
  18. ↑ Kharpal, Arjun (8 May 2019). "Binance bitcoin hack: Over $40 million of cryptocurrency stolen". CNBC. Retrieved 8 May 2019.
  19. ↑ Valinsky, Jordan (8 May 2019). "Hackers steal $40 million worth of bitcoin in massive security breach". CNN. Retrieved 8 May 2019.
  20. ↑ Stewart, Emily (2019-05-08). "If bitcoin is so safe, why does it keep getting hacked?". Vox. Retrieved 2021-05-12.
  21. ↑ Thompson, Luke (2019-05-08). "Binance offers full refund after $40m hack". Asia Times. Retrieved 2021-05-12.
  22. ↑ "Security Incident Recap". Binance Blog. 19 May 2019. Archived from the original on 20 May 2019. Retrieved 2021-05-12. Unknown parameter |url-status= ignored (help)
  23. ↑ "Bitcoin Speculators Gain Upper Hand as Derivative Trading Surges". Bloomberg.com. 2019-10-22. Retrieved 2021-01-21.
  24. ↑ "Disputed claims over acquisition announcement between WazirX and Binance". Insider Apps. Retrieved 2022-08-12.
  25. ↑ "Public Statement". Malta Financial Services Authority. 21 February 2020. Archived from the original on 21 February 2020. Retrieved 26 February 2020. Unknown parameter |url-status= ignored (help)
  26. ↑ "Binance China Blockchain Institute Announced Strategic Partnership with China State-Owned Zhongshang Beidou to Build a New Digital Infrastructure in China". Binance Blog. July 2, 2020. Retrieved 2022-05-08.
  27. ↑ "Crypto exchange Binance to take $200m stake in Forbes". BBC News. February 10, 2022.
  28. ↑ "Ukraine crisis: Crypto exchange boss rejects Russian user ban". BBC News. March 2, 2022.
  29. ↑ "How the Ukraine conflict became a turning point for cryptocurrency". NBC News. Retrieved 2022-03-07.
  30. ↑ Berwick, Angus; Wilson, Tom (2022-04-22). "Special Report: How crypto giant Binance built ties to a Russian FSB-linked agency". Reuters. Retrieved 2022-04-22.
  31. ↑ "Binance registers with Italy's regulator amid plans to expand in Europe". Reuters. 2022-05-27. Retrieved 2022-05-29.
  32. ↑ Griffin, Andrew (2022-06-13). "Crypto exchange Binance blocks bitcoin withdrawals amid market collapse". Independent.
  33. ↑ Binance (2022-06-13). "Withdrawals on Bitcoin (BTC) Network Resumed".
  34. ↑ 34.0 34.1 34.2 Anneken, Tappe (22 April 2021). "Bitcoin? Ethereum? Dogecoin? Your guide to the biggest names in crypto". CNN. Archived from the original on 22 April 2021. Retrieved 2021-05-12. Unknown parameter |url-status= ignored (help)
  35. ↑ "The Evolution of BNB: From Fees to Global DeFi Infrastructure". Binance Blog. 11 April 2021. Archived from the original on 6 May 2021. Retrieved 2021-05-12. Unknown parameter |url-status= ignored (help)
  36. ↑ Vigna, Paul (2021-05-03). "Ethereum Is Booming in the NFT Frenzy—So Is Network Congestion". Wall Street Journal. ISSN 0099-9660. Archived from the original on 2021-05-03. Retrieved 2021-05-12. Unknown parameter |url-status= ignored (help)
  37. ↑ "Binance Smart Chain Launches Today". Binance Blog. 1 September 2020. Archived from the original on 3 September 2020. Retrieved 2021-05-12. Unknown parameter |url-status= ignored (help)
  38. ↑ Wurfel, Sarah (2020-11-08). "Binance vs Binance US: What are the differences between the exchanges?". CapitalCoin.com. Retrieved 2021-06-09.
  39. ↑ "Binance.US Review: Low Fees, But Investors Should Take a Pass". Time. 2021-07-20. ISSN 0040-781X. Retrieved 2022-07-29.
  40. ↑ Tepper, Taylor; Schmidt, John (27 May 2021). "Binance.US Review 2021". Forbes. Retrieved 2021-06-09.
  41. ↑ Schoenberg, Tom (May 13, 2021). "Binance Faces Probe by U.S. Money-Laundering and Tax Sleuths". Bloomberg News. Retrieved 27 June 2021.
  42. ↑ "US Probes Binance Over Token That Is Now World's Fifth Largest". Bloomberg.com. 2022-06-06. Archived from the original on 2022-06-07. Retrieved 2022-06-07.
  43. ↑ "Britain bans Binance in latest cryptocurrency crackdown". Reuters. 27 June 2021. Retrieved 2021-06-27.
  44. ↑ Azevedo Rocha, Priscila; Ossinger, Joanna (June 27, 2021). "Crypto Exchange Binance Banned From Doing Business in U.K." Bloomberg News. Retrieved 27 June 2021.
  45. ↑ "Japan Financial Services Agency - Binance Warning #2" (PDF). fsa.go.jp (in 日本語). Retrieved 2021-09-17.
  46. ↑ "Japan Financial Services Agency - Binance Warning #1" (PDF). fsa.go.jp (in 日本語). Retrieved 2021-09-17.
  47. ↑ "Binance gets regulatory nod in France, paving the way for Europe push". TechCrunch. Retrieved 2022-06-14.
  48. ↑ "UPDATE 2-Germany's financial watchdog warns crypto exchange Binance over "stock tokens"". finance.yahoo.com. April 29, 2021. Retrieved 2021-05-13.
  49. ↑ "English (United States) News_Detail". sec.or.th. Retrieved 2021-09-17.
  50. ↑ "Binance says users in Ontario restricted from using its platform - regulator". Reuters. 2022-03-18.
  51. ↑ "Undertaking and Acknowledgement by Binance Holdings Limited" (PDF). Ontario Securities Commission. 2022-03-17.
  52. ↑ "Dutch central bank fines Binance 3.3 million euros". thehindu.com. The Hindu. 19 July 2022. Retrieved 27 July 2022.
  53. ↑ "India freezes assets of Binance-owned local unit WazirX". reuters.com. Reuters. 5 August 2022. Retrieved 5 August 2022.
  54. ↑ Singh, Manish (5 August 2022). "Binance says it doesn't own Indian exchange WazirX, years after acquisition announcement". TechCrunch.

External links[edit]


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