Binance is the largest crypto exchange on the planet. But American customers cannot trade on the platform.
Instead, they are pointed toward Binance.US, which is available to residents of most, but not all, U.S. states.
The exchange has built up a tremendous suite of products and supported cryptocurrencies. It boasts low fees that are among the most competitive on the market, including zero-fee trading of bitcoin and ethereum.
On the downside, many legal and regulatory issues may concern consumers. In March, a Securities and Exchange Commission official said the agency staff “believes that Binance.US is operating an unregistered securities exchange in the United States.”
The Commodity Futures Trading Commission also recently filed a complaint alleging that parent company Binance violated federal law to solicit U.S. users for revenue, among other allegations.
Pros and cons
As with any exchange, there are pros and cons to Binance.US.
Some will be more relevant to certain customers than others, as each individual may want different things from the exchange and value of certain attributes over others.
Binance.US is a strong exchange that is easy to use and has an excellent suite of products. Not only is its website intuitive, but its mobile app is also among the best in the industry.
It offers more than 150 cryptocurrencies, meaning investors are unlikely to be left wanting for choice. Staking options are also plenty, with 26 coins available (although this is one area in particular that could be under threat by regulation, specifically securities law).
The fees are also extremely competitive, if not the best available anywhere. Several pairs offer zero-fee trading, which can make a huge difference to the bottom line for high-volume and active traders.
But be aware that New York, Texas, Vermont and Hawaii residents cannot trade on the exchange.
The exchange is no stranger to regulatory controversy and has found itself embroiled in lawsuits and investigations over the past year.
While the allegations have not been proven, users should understand that the regulatory regime in the U.S. has been clamping down hard on crypto, and the legal framework does not yet exist to provide any clarity in the area.
Whether this is fair to crypto exchanges such as Binance.US has been the subject of discussion. But from a customer’s point of view, these risks must be considered. The environment is a fast-changing one, and it is hard to say how accommodating the U.S. will be for this U.S.-based exchange in the future.
When it comes to the exchange itself, however, there is not much to criticize Binance.US about. The main drawbacks come away from the trading screen, where a lack of transparency and legal trouble make the picture a little cloudier.
The fees are among the best on the market, with zero-fee trading for some pairs, including bitcoin and ethereum. While the difference in fees may not be significant for many users, it is important for high-volume and active traders.
The wide range of products offered and cryptos supported are also key perks. The website is well built, and the app is easy to use.
The main disadvantage of Binance.US is the threat of what will happen in the future.
There have been lawsuits against the exchange as well as investigations into its relationship with Binance.
While it is important to note that none of the allegations have been proven, their existence is nonetheless a source of risk for investors, at least until they are resolved, and the lack of transparency needs to be considered.
U.S. senators called on Binance in March to “to provide transparency about potentially illegal business practice.”
The Commodity Futures Trading Commission has sued Binance for operating a “sham” compliance program, while the SEC is examining the relationship between Binance.US and two trading firms with ties to Binance CEO Changpeng Zhao.
Binance.US is a very smooth exchange to operate. The only criticism is that certain features can take some time to find at first, but this is more a reflection of the fact that there are so many different niches within the product suite.
The app is equally smooth to use if customers prefer a mobile experience. It is highly rated in both Apple’s App Store and the Google Play Store.
Commissions and fees
The exchange offers free trading in certain pairs, including bitcoin and ethereum. For pairs not included in the zero-fee sector, there is a maker/taker fee for trades. For instance, there is a maker fee of 0.40% and a taker fee of 0.60% for trading Tier I pairs, assuming $10,000 or less is traded over a 30-day period. Tier I pairs include DOT/USD, LTC/USD and SOL/USD, to name just a few.
Beyond that, fees drop in a stepwise fashion as a trader’s volume increases. And if you use BNB to pay for fees, you’ll get 25% off.
There are also withdrawal fees of $10 to $15 payable when pulling fiat out of the exchange via wire. ACH transfers are free.
How Binance.US compares
BNB is the cryptocurrency that powers the Binance ecosystem. One of the most common uses of the coin is to avail yourself of lower fees on the exchange.
It is one of the biggest cryptocurrencies in the world, after bitcoin, ethereum and tether, with a market cap of around $50 billion.
Who is Binance.US best for?
Binance.US is a good exchange for anyone if they can look past the regulatory concerns.
But it is perhaps even more suitable for high-volume traders and institutions, as zero-fee trading on bitcoin and ethereum can make a massive difference to sophisticated trading strategies.
It is hard to criticize the product when it comes to Binance.US. The website is smooth, and the app is strong. More than 150 cryptocurrencies are offered, and customers won’t be left wanting for features.
For the everyday consumer, however, perhaps it would be wise to see how the recent regulatory storm against the exchange plays out. While it is highly unlikely that customer assets will ever be at risk — and no allegations have been proven — the reality is that Binance.US operates in a highly opaque manner and a thorough assessment of the exchange is impossible given this lack of transparency.
Allegations range from a failure to protect against terrorist financing and money laundering to secretive trade and securities violations.
This could all prove false, of course, and perhaps an “innocent until proven guilty” approach would be more just. But it would be easy to understand if users preferred to look elsewhere given events in the crypto industry over the past year, which saw a number of high-profile companies go under with customer funds, including exchange FTX and “crypto bank” Celsius.
Asset custody and security have been thrown into the limelight off the back of this, while regulators have begun to move in harshly on the crypto industry.
Even if that is unfair to Binance.US, investors are understandably on high alert, especially with the lack of transparency on show.
Having said that, the existence of zero-fee trading is an incredible boon to high-volume traders. This feature alone could mean that Binance.US may be the best option available for this cohort.
Frequently asked questions (FAQs)
Binance.US is the American arm of the biggest exchange on the planet, Binance.
The distinction between the two is a much-discussed topic. Binance.US was launched due to regulatory conditions in the U.S.
It is set up as a separate company. But the division has been called into question by U.S. regulators as well as members of the public. Brian Shroder is the CEO of Binance.US, while Zhao leads Binance.
As a much smaller company, Binance.US has significantly less trading volume than its parent. It also supports fewer cryptocurrencies.
This is a difficult question to answer and largely depends on the type of user.
Coinbase is the more transparent and “safer” exchange, given the regulatory issues and lack of transparency around Binance.US. Coinbase is publicly listed and hence adheres to more stringent disclosure requirements, while Binance has been criticized for acting in a highly opaque manner.
Binance.US has lower fees and hence may be a better option for more active traders or high-volume users.
This is hard to say given the lack of transparency around the platform. Certainly, there is no concrete evidence to suggest that user assets are at risk or that the platform is in any way unsafe.
But there are many allegations against both Binance.US and Binance. The fact of the matter is that there is a lack of transparency concerning company financials and how the exchange operates, as well as the relationship with Binance, and that makes a confident assessment of the situation challenging.
Binance.US is required to report transactions that reach a certain threshold to the IRS.
But full access is not available to customers’ holdings and transactions. The area of crypto taxation is also rapidly changing, and new laws are likely in the near future.