Binance Review
Our guide outlines Binance's features, fees, pros, cons, and comparisons with other alternatives.
Updated 31 May 2022
Binance summary
This Binance review covers the following:
Warning:
- Binance is ranked the largest cryptocurrency exchange in the world. The platform often facilitates the equivalent of more than US$20 billion of spot transactions in 24 hours.
- Binance became the largest cryptocurrency exchange in April 2018 as the dust from the late-2017 crypto boom and crash had settled.
- Binance’s founder and CEO, Changpeng Zhao, better known as “CZ”, is a well-known figure in the cryptocurrency community. He has over 3.1 million followers on Twitter.
- Binance was founded in 2017. The funds to launch the company were raised through an initial coin offering (ICO). 100 million BNB tokens were sold for US$0.15, raising US$15 million.
- Binance offers numerous decentralised finance products, including spot cryptocurrency exchange, margin trading, cryptocurrency derivatives, crypto-backed loans, interest-earning savings accounts, NFT, launchpad, and more.
- Binance has no firm headquarters and has relocated operations multiple times to avoid regulatory obstacles. Binance founder CZ’s is to have a decentralised company without any official headquarters. It seems regulators take issue with that sentiment. Binance has faced regulatory scrutiny worldwide through 2021.
- Binance supports 378 coins and hosts 1,363 markets on its platform.
- In summary, Binance is by far the largest cryptocurrency exchange worldwide by trading volume. In recent times, Binance has become the go-to choice for many cryptocurrency investors and speculators.
This Binance review covers the following:
- Introduction to Binance
- Products and services
- Deposits and withdrawals
- Understanding BNB coin
- The pros and cons of using Binance
- Binance vs Easy Crypto vs BitPrime
- Frequently asked questions
Warning:
- By publishing this guide, we are not recommending or suggesting in any way or form that Bitcoin or any other cryptocurrency is a suitable investment.
- Binance is not registered to provide services in New Zealand. The company operates in grey areas, which implies additional risk.
- Binance offers leveraged derivatives which, by design, incur significant risk.
- We published and update this guide to help people understand the Binance platform - MoneyHub is conservative, and our publisher, Christopher Walsh, has zero Bitcoin or other cryptocurrency investments.
- We present this information in good faith and remain objective at all times. By including this guide under our Investing and Saving section, we are not advocating that cryptocurrency is an investment. We may earn a referral bonus for anyone that clicks on some of the below links - see our Advertising Policy for more details.
Buying bitcoin with two local and trusted platforms - Easy Crypto and Swyftx
- Our bitcoin research highlighted several bitcoin platforms, but few are based in New Zealand and offer transparency. For this reason, we suggest considering the locally-owned (and trusted) Easy Crypto alongside Swyftx, an Australian-based platform.
- These two platforms are popular with our users, have esteemed reputations and are trusted by tens of thousands of New Zealanders.
- Both options are free to join, funded from any New Zealand bank account/card, and in the case of Easy Crypto, there is a local support team.
- Advertising Disclosure: We may earn a referral bonus for anyone that clicks on some of the below links - see our Advertising Policy for more details.
Introduction to Binance
Binance is the largest cryptocurrency exchange and it didn’t happen by accident. They understood what traders want and need and built precisely that before anyone else did. Binance’s ascent to becoming the largest exchange happened very quickly. Binance offers a versatile desktop, web and mobile trading platform, available in two formats, classic and advanced, where users can buy and sell hundreds of assets and speculate on various derivative markets too. The desktop platform is available for Windows, macOS and Linux operating systems.
Another characteristic that led so many users to Binance was a competitive fee structure. The platform is one of the most competitive on the market. Another factor leading to the company’s notoriety is the large and fast-growing range of markets listed and the products offered.
Highlighting the interest in the company’s services, according to popular cryptocurrency industry tracking website CoinMarketCap, Binance is by far the largest crypto exchange. For comparison, at midnight on Sunday the 8th of August 2021, Binance’s 24-hour trading volume was US$24,991.5 million, while the second-largest exchange, Coinbase, had its 24-hour volume registered at US$3,857.7 million.
Binance is a top ten visited website in the investing category, according to SimilarWeb. The main website, binance.com, received over 130 million visits in June 2021.
One of the reasons Binance can be so competitive and versatile is that the company is not regulated in most countries aside from Singapore and the US. Compliance is one of the highest costs financial services companies face, and Binance largely avoids those burdens. However, the lack of regulation has led to growing investigations, restrictions, translating into reduced revenue and growing legal costs instead.
Another characteristic that led so many users to Binance was a competitive fee structure. The platform is one of the most competitive on the market. Another factor leading to the company’s notoriety is the large and fast-growing range of markets listed and the products offered.
Highlighting the interest in the company’s services, according to popular cryptocurrency industry tracking website CoinMarketCap, Binance is by far the largest crypto exchange. For comparison, at midnight on Sunday the 8th of August 2021, Binance’s 24-hour trading volume was US$24,991.5 million, while the second-largest exchange, Coinbase, had its 24-hour volume registered at US$3,857.7 million.
Binance is a top ten visited website in the investing category, according to SimilarWeb. The main website, binance.com, received over 130 million visits in June 2021.
One of the reasons Binance can be so competitive and versatile is that the company is not regulated in most countries aside from Singapore and the US. Compliance is one of the highest costs financial services companies face, and Binance largely avoids those burdens. However, the lack of regulation has led to growing investigations, restrictions, translating into reduced revenue and growing legal costs instead.
Products and Services
Binance offers a wide range of products and services. Besides cryptocurrency exchange and trading services, the company offers numerous decentralised finance products, and NFT. In this Binance review, we’ll focus on the trading aspect of what the company offers. Binance offers 378 coins and hosts 1,363 markets altogether. Many coins are quoted against a few coins. For example, BTC is traded against ETH, BNB, USDT, TUSD, USDC, DAI, PAX and others, meaning there are several Bitcoin markets.
There are multiple ways to trade on Binance, and we’ll walk you through some of them.
There are multiple ways to trade on Binance, and we’ll walk you through some of them.
Convert cryptocurrencies on Binance
The simplest way is using the simple-to-use conversion tool that automatically processes your order using the best available price from the marketplace while abounding having to deal with any charts, indicators, fancy order types or anything else. All you do is enter how much you want to buy or sell, and the price is automatically calculated.
Binance Convert & OTC Portal
Commissions and fees
When buying or selling cryptocurrencies using the Convert tool, the fees are already factored into the price. The price for using this service isn’t transparent. Based on a brief glance, it doesn’t look like the fees are that high. The spread was in the region of 0.1%, which is comparable to the spot exchange fees.
Spot trading cryptocurrencies on Binance
The Binance cryptocurrency exchange platform comes in two formats: classic and advanced. There isn’t a huge difference between the two platform versions, except the layout is slightly different. Both platforms are equipped with an order book for each market, new order forms, a stream of last trades, volume indicator, depth chart, a wide range of chart settings, indicators, order management functions and trading history. Your trading account can also be accessed from the mobile application.
Binance's classic trading interface
Commissions and fees:
Binance uses a maker-taker model, where traders who make the market, i.e. put limit orders in the order book, pay less than takers, who take liquidity from the market by using market orders. Spot trading fees start from 0.1% for makers and takers. Binance offers discounts based on your VIP level; there are 9 in total. VIP status is based on either trading volume or how much BNB balance you have in your account. An additional discount is available if your fees are paid using BNB.
Margin trading on Binance
Binance offers margin trading on the markets listed on the exchange. Margin trading shouldn’t be confused with futures trading; Binance offers both products, which are quite different. Both products involve leverage, which increases your exposure and, ultimately, your risk. Cryptocurrency markets are known for their high volatility, meaning any crypto investment or speculation carries high degrees of risk, and leverage only amplifies the risk.
Using margin trading lets you borrow coins against collateral which can be useful in three ways. Firstly, you can increase your exposure. Secondly, you can borrow assets you don’t own by borrowing others against your collateral to speculate on markets without owning either of the assets. Thirdly, you can also short-sell by borrowing an asset you don’t own. Keep in mind that if your predictions are wrong and you begin losing, your collateral will be liquidated to prevent losing the money you borrowed. Only your funds are risked when margin trading.
Margin trading on Binance works differently from classic brokers in regulated markets. Leverage, which is essentially a loan, isn’t supplied by Binance; it’s supplied by the community. Other Binance users can loan funds for margin traders and earn part of the interest.
Margin trading commissions and fees:
When using margin trading, you’ll pay two fees. The first is spot trading fees (described above), and the other is interest for borrowing against your margin. The interest you pay depends on the coin you borrow and your VIP level.
For example, borrowing BTC incurs a 0.05% daily interest rate, whereas borrowing BNB incurs a 0.300000% daily interest rate.
Using margin trading lets you borrow coins against collateral which can be useful in three ways. Firstly, you can increase your exposure. Secondly, you can borrow assets you don’t own by borrowing others against your collateral to speculate on markets without owning either of the assets. Thirdly, you can also short-sell by borrowing an asset you don’t own. Keep in mind that if your predictions are wrong and you begin losing, your collateral will be liquidated to prevent losing the money you borrowed. Only your funds are risked when margin trading.
Margin trading on Binance works differently from classic brokers in regulated markets. Leverage, which is essentially a loan, isn’t supplied by Binance; it’s supplied by the community. Other Binance users can loan funds for margin traders and earn part of the interest.
Margin trading commissions and fees:
When using margin trading, you’ll pay two fees. The first is spot trading fees (described above), and the other is interest for borrowing against your margin. The interest you pay depends on the coin you borrow and your VIP level.
For example, borrowing BTC incurs a 0.05% daily interest rate, whereas borrowing BNB incurs a 0.300000% daily interest rate.
Derivatives trading on Binance
Binance offers various derivative products for speculating on cryptocurrency markets. Derivatives are highly complex products and speculative in nature. This section is merely an introduction, and if you’re interested in these products, we strongly recommend you study the characteristics of these products at the Binance Academy website.
Binance futures
Binance offers two types of futures products called USDⓈ-M Futures and COIN-M Futures. The main difference is that the former is quoted and settled in either BUSD or USDT stablecoins, pegged to the US dollar. The latter is quoted in USD but settled in either BTC or ETH.
The contracts are settled quarterly, or they are perpetual. The maximum leverage available is 1:125, meaning the initial margin to open the contract is only 0.80% of the contract notional value. Just because the initial margin is very low, you still need a maintenance margin to cover drawdown; otherwise, your position is liquidated. The leverage offered depends on the contract and the exposure. I.e. the more contracts you open, the less leverage you’re given. Additionally, Binance limits leverage to 1:20 for users with accounts younger than 60 days.
Futures commissions and fees:
Commissions for USDⓈ-M Futures begin at 0.02%/0.04% (maker/taker) and for COIN-M Futures begin at 0.01%0.05% (maker/taker). Both products offer discounts depending on VIP status.
You should be aware of other fees, such as interest rates for leverage and using the cross-collateral feature.
Binance futures
Binance offers two types of futures products called USDⓈ-M Futures and COIN-M Futures. The main difference is that the former is quoted and settled in either BUSD or USDT stablecoins, pegged to the US dollar. The latter is quoted in USD but settled in either BTC or ETH.
The contracts are settled quarterly, or they are perpetual. The maximum leverage available is 1:125, meaning the initial margin to open the contract is only 0.80% of the contract notional value. Just because the initial margin is very low, you still need a maintenance margin to cover drawdown; otherwise, your position is liquidated. The leverage offered depends on the contract and the exposure. I.e. the more contracts you open, the less leverage you’re given. Additionally, Binance limits leverage to 1:20 for users with accounts younger than 60 days.
Futures commissions and fees:
Commissions for USDⓈ-M Futures begin at 0.02%/0.04% (maker/taker) and for COIN-M Futures begin at 0.01%0.05% (maker/taker). Both products offer discounts depending on VIP status.
You should be aware of other fees, such as interest rates for leverage and using the cross-collateral feature.
Binance Options
Binance also offers European style vanilla options contracts to speculate on the price of Bitcoin using options contracts.
Binance's options trading interface
Leveraged Tokens
Leveraged tokens are yet another derivative product Binance offers. Unlike the derivatives mentioned above, leveraged tokens are unique since they allow users to leverage positions without any liquidation risk. Although you don’t need to provide a margin to buy leveraged tokens, the leverage rate is dynamic and adjusts between a target of 1:1.25 and 1:4 but may exceed those parameters. Just because you don’t have the risk of losing your collateral, your profit and loss are influenced by the market value of the underlying asset. The underlying asset of leverage tokens is futures contracts, meaning this product is a derivative of a derivative.
Battle
Binance has created a gamified battle interface alongside futures trading. The battle product simply allows you to earn points and prizes in addition to winning or losing money. Battles last for five minutes or less; all you have to do is predict if the price will go up or down. If you’re right, you’ll earn money from the futures transaction, plus some points, whereas if you lose, you’ll lose money according to the futures contract and not receive any points. It’s unclear what the advantage of this product is besides making trading more fun and less skill and strategy based.
Deposits and withdrawals
Binance offers a custodial wallet for users to keep their funds on the platform, ensuring they are available for trading operations. Binance does not charge for making crypto deposits but does for making withdrawals. There is a minimum withdrawal limit too.
For example, withdrawing Bitcoin from Binance costs 0.0005 BTC (NZ$30.25), and the minimum you can withdraw is 0.001 BTC (NZ$60.5).
For example, withdrawing Bitcoin from Binance costs 0.0005 BTC (NZ$30.25), and the minimum you can withdraw is 0.001 BTC (NZ$60.5).
Binance regulation and headquarters
Binance had the opinion that as a decentralised finance company, it could operate the company with a decentralised corporate structure, notably not having any official headquarters. Binance’s founder and CEO, CZ, has never defined where the company is headquartered, regularly arguing that the company doesn’t need bank accounts, postal addresses, etc. The company doesn’t need offices, it employs people remotely, and even he works from home.
Despite the company not having an official headquarters, it does have several registered businesses, primarily for managing trademarks and intellectual property, employing people, paying local taxes, and performing payroll.
Please be aware:
Despite the company not having an official headquarters, it does have several registered businesses, primarily for managing trademarks and intellectual property, employing people, paying local taxes, and performing payroll.
- Binance Asia Services Pte. Ltd. is incorporated in Singapore (UEN: 201811768M) and only provides services to Singaporeans via the website binance.sg. The Monetary Authority of Singapore does not license this company.
- BAM Trading Services Inc. is incorporated in Delaware in the United States (Company number 7266675). The company provides services to US residents via the website binance.us and has several money transmission licenses in various states across the USA.
- Binance Holdings Ltd is incorporated in the Cayman Islands and is the parent company of other companies. The Cayman Islands Monetary Authority published a statement informing the public that Binance is not registered, licensed, regulated or otherwise authorised by the Authority to operate a cryptocurrency exchange from or within the Cayman Islands.
- Binance Europe Services Limited is registered in Malta (Company number: C85624). The Malta Financial Services Authority has gone on record to inform the public that Binance is not subject to any regulatory oversight from Maltese authorities.
- Binance Markets Limited is incorporated in the United Kingdom (Company number: 09510915). The company previously traded as EDDIEUK LTD but was purchased by Changpeng Zhao on the 8th of June 2020, and the company name was subsequently changed on the 10th of June. The Financial Conduct Authority licensed EDDIEUK LTD in the UK and subsequently Binance Markets Limited. However, the FCA issued a notice to inform the public that the company is not currently permitted to undertake any regulated activities in the UK.
Please be aware:
- It’s rumoured there are several more Binance companies. However, these are the ones with notoriety in the public domain.
- Concerning regulation, besides a handful of money transmission licenses in the United States, which most US-based crypto exchanges are required to have, Binance is not regulated in most countries yet aside from Singapore and the US.
- Binance has recently received warnings from regulators in Japan, the UK, Cayman Islands, Hong Kong, Thailand, Germany, Poland and Lithuania. Since then, CZ has gone on the record to say, “we want to be licensed everywhere". This includes on-going work across Asia-Pacific, EMEA and Latin America. However, it seems the recent regulatory scrutiny has made him rethink his beliefs on being a decentralised company without a headquarters.
Buying bitcoin with two local and trusted platforms - Easy Crypto and Swyftx
- Our bitcoin research highlighted several bitcoin platforms, but few are based in New Zealand and offer transparency. For this reason, we suggest considering the locally-owned (and trusted) Easy Crypto alongside Swyftx, an Australian-based platform.
- These two platforms are popular with our users, have esteemed reputations and are trusted by tens of thousands of New Zealanders.
- Both options are free to join, funded from any New Zealand bank account/card, and in the case of Easy Crypto, there is a local support team.
- Advertising Disclosure: We may earn a referral bonus for anyone that clicks on some of the below links - see our Advertising Policy for more details.
Understanding BNB coin
Binance developed its own token when conducting its ICO in July 2017. A total of 200 million BNB tokens were issued, and 100 million were sold for US$0.15 to raise US$15 million. The BNB coin is considered a utility token, as owning or using BNB unlocks certain benefits. For example, you can use BNB to get discounted trading fees.
Currently, the circulating supply is 168,137,036 BNB because Binance burns (destroys) tokens every quarter. The company’s profitability determines the burn rate. 20% of profit is used to buy back and burn BNB. In the most recent burning event, Binance burned 1,099,888 BNB, equivalent to US$595,314,380.
Despite being a utility token, BNB turned out to be a great payoff for anyone who bought early. At the time of writing, the market cap of BNB is US$62.1 billion, making it the fourth highest market cap. At the all-time high, BNB reached US$704.62.
Currently, the circulating supply is 168,137,036 BNB because Binance burns (destroys) tokens every quarter. The company’s profitability determines the burn rate. 20% of profit is used to buy back and burn BNB. In the most recent burning event, Binance burned 1,099,888 BNB, equivalent to US$595,314,380.
Despite being a utility token, BNB turned out to be a great payoff for anyone who bought early. At the time of writing, the market cap of BNB is US$62.1 billion, making it the fourth highest market cap. At the all-time high, BNB reached US$704.62.
Binance - Pros and Cons
Binance has a lot to offer, but there is also a lot to consider:
The advantages of using Binance in New Zealand:
The disadvantages of using Binance in New Zealand:
The advantages of using Binance in New Zealand:
- Deep liquidity: As Binance is the largest crypto exchange in the world, it offers deep liquidity, generally implying more competitive pricing and less slippage on your orders.
- Very low exchange fees: Binance has very low fees for trading on the exchange compared to other exchanges.
- Very low mininum trading amount: $10 is the minimum trading size for most of the trading pairs in Binance.
- Impressive range of products: A wide range of supported coins, markets and decentralised finance products.
- Great reputation: Binance has a strong reputation in the cryptocurrency community, and many traders are advocates for the company.
- Rich educational resources: Binance has a comprehensive academy packed with educational content covering numerous topics.
The disadvantages of using Binance in New Zealand:
- Limited choice of payment methods: Buying crypto with your debit or credit card through a third party payment processor such as Simplex incurs high fees. For example, buying NZ$200 worth of Bitcoin would incur a 7.68% fee. There are no options for bank transfers. If you’re looking to buy Bitcoin with dollars, you’re better off using local options like BitPrime or EasyCrypto.
- Questionable legal status: Binance is not regulated in most countries and was recently hit by a wave of regulatory warnings.
- High withdrawal fees: An infamous characteristic of custodian wallets provided by exchanges is high withdrawal fees. Withdrawing some coins can be higher than fifty dollars, depending on market prices.
Alternatives to BitPrime - Binance vs Easy Crypto vs BitPrime vs LocalBitcoins
Binance isn't the only option for New Zealanders. If you’re an active trader speculating on the different cryptocurrencies, Binance is probably the platform that makes the most sense for you. However, if you’re a long term investor or infrequent crypto user, you’re probably going to find Easy Crypto or BitPrime more convenient. These two companies accept bank wire transfers and POLi, which are far more cost-effective than using Simplex or other card processes Binance offers.
Easy Crypto
- Payment methods: POLI instant pay, or local NZ bank transfer
- Fees: All fees are included in the spread, which is why the bid and offer prices might look higher than other platforms. The fees are around 0.70% to 0.90%.
- Minimum order size: NZ$100
- Settlement: Private wallet
- Coins available: 109, including Bitcoin
- Learn more: Easy Crypto
BitPrime
Important - in May 2022, BitPrime halted operations after adverse crypto markets led to liquidity issues. We understand BitPrime is looking to re-launch via a crowd-supported campaign and will update this review when its future is more certain. The information below is historical:
- Payment methods: Bank transfer, POLI, and debit/credit card via third-party payment provider Simplex
- Fees: Fees depend on the payment method and order size. For card payments, the fee is 5%. For bank transfers below NZ$20,000, the fee is 2.9%, for larger transactions, discounts are available
- Minimum order size: NZ$100
- Settlement: Private wallet
- Coins available: 89 different coins, including Bitcoin. Almost all coins are able to be sourced through their Custom Order page.
- Learn more: BitPrime
LocalBitcoins
- Payment methods: It depends on your agreement with the seller
- Fees: A fee of 1% is charged to the party which listed the ad on the platform, other fees might be priced into the offer from the seller
- Minimum order size: The seller sets the minimum order size
- Settlement: Private wallet
- Coins available: Bitcoin only
- Learn More: LocalBitcoins
Binance - Frequently Asked Questions
Binance is user-friendly and transparent, but there are still some must-know facts to be aware of. We answer common questions below:
Is Binance regulated in New Zealand?
No. Binance is not regulated in New Zealand. Binance has no official presence in New Zealand, meaning the company is not registered or incorporated in New Zealand. The company largely operates in grey areas and offers products that are not covered by existing regulations.
Is Binance restricted in New Zealand?
No. Binance is not restricted in New Zealand. However, the exchange is not registered in New Zealand, which carries a certain level of risk. For example, firms registered with the FSPR are required to enrol on a dispute resolution scheme, which affords certain protections to consumers.
Has Binance ever been hacked?
Yes. Binance has publicly disclosed one hacking event. Binance announced on the 8th of May 2019 it had discovered a large-scale security breach that occurred the previous day. The hackers withdrew 7,000 BTC of customers' funds, worth approximately NZ$61 million. The company suspended withdrawals and any new deposits until they could fix the vulnerability. Binance covered the loss from its Secure Asset Fund for Users, better known by the acronym SAFU. The SAFU is funded by allocating 10% of trading fees to the fund.
Do I need to pay taxes on my cryptocurrencies if I had made a profit?
Yes - to understand more about tax on cryptocurrencies, visit our tax on investments and consult the IRD's website here.
Do I need to set up a wallet to use Binance?
No, but you still should. Binance offers a custodial wallet to keep your cryptocurrencies on the exchange to make trading convenient. Binance attracts speculators who may transact several times per day, meaning it’s comfortable for them to keep funds on an account while they trade. Unless you’re an active trader, you should seriously consider other solutions to keep your assets safe, especially considering Binance was hacked previously. Learn more about protecting your cryptocurrencies in our Bitcoin wallet guide.
Can I only trade BNB with Binance?
No. You can trade BNB with other cryptocurrency exchanges too. BitPrime and EasyCrypto both offer BNB trading on their platforms. The BNB token is a decentralised asset, meaning anyone can transact freely. However, you should note that BNB is not an ERC-20 token, it runs on Binance Smart Chain, a blockchain network developed by Binance, and most wallets do not support this protocol. If you’re considering purchasing BNB, we recommend reading The Best Crypto Wallets for Binance Smart Chain (BSC) article from the Binance Academy.
Related Guides
- How to Buy Bitcoin in New Zealand
- How to Buy Ethereum in New Zealand
- Easy Crypto Review
- BitPrime Review - Important - in May 2022, BitPrime halted operations after adverse crypto markets led to liquidity issues. We understand BitPrime is looking to re-launch via a crowd-supported campaign and will update this review when its future is more certain.
- Beginner's Guide to Cryptocurrencies
- New Zealand Bitcoin Exchanges
- Bitcoin in New Zealand
- How to Buy Ripple in New Zealand
- How to Buy Cardano in New Zealand
- Bitcoin and Crypto Scams
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- Joshua Wang YouTube Guide (buying Bitcoin in New Zealand)
