What is Binance US? An In-Depth Guide for Crypto Traders
Binance US is a rapidly emerging cryptocurrency exchange created explicitly to serve American traders and investors. Launched in September 2019, it stands out as one of the few exchanges catering specifically to US regulatory requirements while still offering a robust crypto trading experience.
But who is behind this new American exchange and can it be trusted? In this 2600+ word guide, I‘ll provide an in-depth look at the origins, features, and development of Binance US – equipping you with everything you need to determine if its the right exchange for your crypto trading needs.
The Birth of an American Crypto Star
Binance US represents an ambitious effort between Binance and its US partners to credibly serve the American crypto market. But Binance itself needs no introduction – launched in 2017 by Changpeng "CZ" Zhao, the international version exploded into the world‘s largest crypto exchange by trading volume, serving over 120 million users across the globe.
Sensing major potential in regulated US markets and seeking to mitigate regulatory uncertainty regarding the main platform‘s availability to Americans, Zhao spearheaded efforts to launch a US-based exchange in 2019.
“The entry of Binance US into the marketplace illustrates our commitment to our users as a transparency first and security first exchange operator.” – Catherine Coley, CEO of Binance US
He tapped his former Ripple colleague Catherine Coley as Binance US CEO, who assembled a compliance-focused team to tackle the complex patchwork of US state and federal regulations governing cryptocurrency markets.
Major American investors also backed the exchange‘s rapid growth, with key funding rounds attracting support from:
- Initial investor round (2019): Raised $1 million from BAM Trading Services
- Series A round (Feb 2022): Raised $200 million led by RRE Ventures, Foundation Capital, Original Capital, VanEck Associates Corp., etc.
This influx of funding reflects investor confidence in Binance US‘s potential. But does the platform live up to its promises for American crypto traders? Let‘s analyze its key features.
Complying With Evolving US Regulations
Regulations governing crypto trading differ significantly between various American states and deviate further from international guidelines. This complex legal landscape makes launching a crypto business daunting:
| Regulation | Description |
|---|---|
| Federal Bank Secrecy Act | Requires exchanges to register as Money Services Businesses (MSB), uphold strict KYC/AML standards |
| State money transmission laws | Necessitate state-by-state licenses to operate as an MSB |
| Evolving policies | Varying stances between states, frequent proposals for new consumer protections |
Navigating this patchwork poses major hurdles when trying to serve US clients. Many exchanges like Binance simply geo-block American traffic rather than tackle compliance.
Binance US stands apart with licenses to operate in most states barring restrictions in Connecticut, Hawaii, Idaho, Louisiana, New York, Texas, and Vermont. Even while lacking regulatory approval in those jurisdictions, they maintain an aggressive focus on upholding security and transparency standards across all operations.
Specific Binance US compliance steps include:
✔️ Mandatory KYC for all users with ID document verification
✔️ Systematic procedure for requesting user data under subpoenas
✔️ Transaction monitoring systems for fraud and money laundering detection
✔️ Ongoing system security audits from firms like CertiK
✔️ Insuring user funds against crime or theft through pooled insurance policies
✔️ Limiting access to 243 coins out of 8000+ to exclude potential securities
This focus alleviates a major pain point for traders – trusting exchanges with their funds and data. Binance US‘s commitment to dialogue with regulators also helps it adapt to evolving US policies.
But does that diligent regulatory focus come at the cost of stunted crypto asset support?
Trading Cryptocurrencies on Binance US
Despite a reduced total asset count, Binance US offers traders exposure to all major crypto categories – unlike competitors explicitly banning certain sectors. Spread across 50+ coins and 150+ trading pairs, the selection includes:
Blue chip currency coins like Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC)
Stablecoins like USD Coin (USDC), Binance USD (BUSD), DAI
Top altcoins e.g. Bitcoin Cash (BCH), Chainlink (LINK), Dogecoin (DOGE)
Prominent DeFi tokens such as Uniswap (UNI), Aave (AAVE), Compound (COMP)
Leading metaverse and NFT coins like Decentraland (MANA), Sandbox (SAND), Flow (FLOW)
And many more across both crypto staples and emerging sectors!
The only notable exceptions are privacy-focused coins like Monero and ZCash that raise flags regarding money laundering or illegal usage.
But how effectively does this wide net of coins translate to tangible value for US traders? Let‘s analyze key trading metrics.
| Metric | Value |
|---|---|
| Supported trading pairs | Over 150 |
| 30-day trading volume | $1.3 billion+ |
| Total users | Over 8 million |
These figures indicate high liquidity – ease of entering and exiting positions without significant price impact. Large trading volumes translate to tight spreads between the bid and ask prices.
For traders, this means efficiently trading between cryptocurrencies at near-ideal market rates. Especially for large block trades, low spreads save significantly on slippage during entries and exits.
Beyond liquidity, Binance US also ensures prompt asset listing so traders swiftly gain access to new and trending coins. The only caveat is that tokens require approval after internal reviews, unlike decentralized exchanges allowing direct listing of any asset.
Nonetheless,Binance US moves rapidly to enable trading latest cryptos – especially compliance-friendly DeFi and metaverse tokens capturing investor interest.
With robust general liquidity alongside agile listing of trending assets, the platform delivers substantive real-world value to traders.
Trading Platform Experience
Ease of actually using a crypto exchange makes or breaks the trading experience. On that front, Binance US sports a responsive web interface alongside mobile apps for iOS and Android devices.
Both platforms use clean designs providing key functionalities without visual clutter such as:
- Detailed graphing with tracking popular indicators like moving averages
- Order entry forms supporting market, limit, and other order types
- Customizable layouts letting traders organize widgets for personal workflows
- Portfolio tracking with profit/loss summaries for assets
The convenience of mobile access perfectly complements the desktop experience – granting traders oversight of positions while on the move.
Usability is further smoothed by multiple order types suiting different trading strategies:
- Market orders for easily entering/exiting spots
- Limit orders defining buy/sell price thresholds
- Stop-limit orders setting automated trigger points to cap losses
Sophisticated traders even employ algorithms accessing Binance US‘s feature-rich API to automate custom strategies.
With a combination of visual clarity, functional depth, and cross-device accessibility – both casual investors and writing algorithms can find a workflow fitting their requirements thanks to Binance US‘s adaptable trading interfaces.
Account Security and Insurance
Security represents a pivotal pillar given crypto‘s irreversible transactions and rampant theft. Binance US implements robust policies securing user assets without sacrificing usability such as:
Mandatory KYC helping verify legitimate account ownership
2-step authentication via Google Authenticator or email codes
Address whitelisting to restrict payment destinations
Risk engine detecting compromised accounts
Mandatory signed messages for withdrawals
Partial multi-signature wallets needing multiple sign-offs before asset transfers
Over 90% assets in air-gapped cold storage safeguarded offline in bank-grade vaults
$750 million insurance fund through leading insurers to cover losses
These controls create layered account and asset security – both deterring attacks and insulating impact if breaches occur. Insurance guarantees additionally protect users against losses.
By virtue of BAM Trading Services operating the exchange, Binance US also falls under FDIC coverage – insuring USD balances like a traditional bank.
CostEfficiency Through Competitive Fees
While inputting rigorous security and compliance steps, Binance US maintains high cost-efficiency. Its sliding fee structure based on 30-day trade volume is highly competitive:
| 30-Day Volume | Maker Fee | Taker Fee |
|---|---|---|
| $0-$50K | 0.20% | 0.20% |
| $50K-$100K | 0.18% | 0.18% |
| $100K-$1M | 0.16 | 0.18% |
| $1M-$10M | 0.14% | 0.16% |
| $10M+ | 0.12% | 0.14% |
Additional 25% discounts apply for trades conducted using the native BNB token.
These maker/taker rates beat most competitors, translating into reduced trading costs:
| Exchange | Maker Fee | Taker Fee |
|---|---|---|
| Binance US | 0.1-0.2% | 0.1-0.2% |
| Coinbase | 0.5% | 0.5% |
| Kraken | 0.16-0.26% | 0.26% |
| KuCoin | 0.1% | 0.1% |
Lower fees benefit high-volume traders conducting frequent transactions. Over a year, saving 0.1% on a daily $100,000 trade translates into $3,650+ savings!
Beyond trading, Binance US charges zero fees for depositing via ACH/wire (minus network costs). Withdrawal fees are fixed based on blockchain network charges to move assets.
The competitive fee structure keeps usage costs low across various user activities – trading, deposits, withdrawals etc.
Customer Support
Even advanced platforms suffer issues needing specialized staff support. In this regard, Binance US provides responsive customer assistance through:
- 24/7 live chat directly within the website
- Support ticketing system to manage more complex cases
- Public Telegram community that is officially administered
Typical inquiries relate to technical issues, account access concerns, and questions regarding using platform features. Support coverage also handles risk-related cases like fraud claims or hacking attempts.
According to Binance US representatives, the customer support team fields hundreds of inquiries per week with the following breakup based on severity:
- Extremely urgent: 2-5%
- High severity: 35-40%
- Medium severity: 55-60%
- Low severity: 5-10%
They report a first response time within 24 hours for >90% of high/extremely urgent cases and resolution times averaging between 2-5 days.
Considering the inherent complexities surrounding crypto transactions and security, this response efficiency exceeds benchmarks at traditional financial institutions. Coupled with multiple access channels and experienced crypto / compliance personnel, Binance US customer support delivers prompt outcomes meeting trader expectations.
Additional Features
Beyond a robust core trading experience, Binance US offers a few additional features useful for crypto investors including:
Earn Interest Through Staking
By holding certain tokens like ATOM, ALGO, and VET in their wallet, users can participate in staking – validating transactions on proof-of-stake blockchains for rewards. Interest rates range from ~5% to 15% based on the coin. It’s an easy way to earn passive income on idle holdings.
Over-the-Counter (OTC) Trading
For executing large orders above $10,000, traders can access personalized pricing and support through Binance US’s OTC trading desk rather than relying solely on order books. The desk provides tailored quotes ensuring minimal price impact on substantial trades.
Auto-Diversification Via Recurring Orders
Recurring buy/sell orders let traders automatically execute timed portfolio additions or liquidations. It enables seamlessly averaging into positions to mitigate volatility risk.
Together with staking opportunities and OTC services, these features unpack added benefits exceeding basic trading functionality.
Recent Developments
Despite positive momentum, Binance US continues facing familiar challenges confronting regulated crypto businesses such as:
Persistent delays in securing full state-level operating licenses – still pending approval in 7 states. Difficulty satisfying each jurisdiction’s compliance demands continues posing market availability hurdles.
Pressing investor class action lawsuits in California centered around allegations of lax anti money laundering controls against international parent Binance. While technically a separate entity, lingering public skepticism towards Binance may negatively impact Binance US adoption.
Financial reporting indicating widening losses over 2021 exceeded $360 million as the company aggressively expands despite missing profitability targets. Questions linger regarding when scaling user signups may translate to self-sustaining business metrics.
Regardless, customer sentiment and platform volumes showcase Binance US’s product-market fit with American crypto traders. For Q3 2022, the exchange recorded:
Quarterly trading volume over $167 billion
Monthly active users crossing 2.42 million
Average daily volume at $2.5 billion+ per day, massively above competitor volumes:
| Exchange | 30D Vol |
|---|---|
| Coinbase ($54.5B) | $1.3B |
| Kraken ($275B) | $2.1B |
| Binance US ($167B) | $2.5B |
(Volumes via Nomics)
This data signals Binance US‘s resonance with America‘s growing retail and institutional crypto investment community.
The Pros and Cons
Based on our analysis across security, coin selection, trading costs, liquidity, and other factors – here is a summary of notable Binance US pros and cons:
Pros
- High liquidity – massive 30D trading volumes with tight spreads
- Low trading & withdrawal fees vs major competitors
- Excellent mobile/desktop platform experience
- Support for USD pairs and all major crypto assets
- Responsive, knowledgeable 24/7 customer assistance
- Technically regulated to serve US traders in most states
- Competitive staking yields on supported tokens
- OTC services catering to large institutional traders
Cons
- Restricted access in 7 US states pending regulatory approvals
- Fewer total available trading pairs than main Binance exchange
- Continued skepticism regarding international Binance‘s influence
- Dependency on market conditions to achieve profitability
Balancing these tradeoffs depends on individual traders‘ priorities and use cases. Numerous benefits around security, convenience and liquidity may outweigh drawbacks for mainstream American investors.
Closing Thoughts
Since inception in 2019 amidst crypto‘s regulatory winter, Binance US continues gaining legitimate footing catering to US traders through:
Commitment to compliance – upholding strict KYC and asset security protocols
Support from American investors and Binance’s resources
Mainstream coin availability across 1,400+ pairs
Competitive trading fees beating major exchanges
Established banking relationships enabling fiat onramps
While work remains onboarding more states and resolving legal disputes, the platform’s growth mirrors crypto acceptance in the US. With high liquidity, polished interfaces, and focus rivaling Coinbase, Binance US looks poised to capture America’s rapidly expanding retail and institutional crypto investment market share.
