Ultimate Resource On Binance (#GotBitcoin?)
Top cryptocurrency exchange Binance is launching an open blockchain project “Venus” focused on developing localized stablecoins worldwide. Ultimate Resource On Binance (#GotBitcoin?)
In an announcement published today, Aug. 19, the exchange argues it is well-positioned to launch such a currency ecosystem in light of its existing public chain technology, Binance Chain, wide user base and already established global compliance measures.
Leveraging Existing Know-How
The exchange says it is seeking partnerships with governments, corporations, technology firms, and other cryptocurrency and blockchain projects in order to develop a new currency ecosystem that will empower both developed and developing countries
The exchange’s vision for the project, per the announcement, is to “build a new open alliance and sustainable community” that enlists partners who wield influence on a global scale.
Binance Chain, as the announcement notes, has already been running several native asset-pegged stablecoins, including a Bitcoin (BTC)-pegged stablecoin (BTCB) and the Binance BGBP Stable Coin (BGBP) pegged to the British Pound.
Binance says it will leverage its existing infrastructure and experience with various regulatory regimes to consolidate a compliance risk control system and build a multi-dimensional cooperation network for the Venus project.
Vying With Libra
Binance’s ambitious new venture appears to compete directly with plans from social media titan Facebook to launch a fiat-pegged stablecoin, Libra, that would power a global crypto payments network embedded into the company’s three wholly-owned apps: WhatsApp, Messenger and Instagram.
With its choice of name, “Venus,” Binance is also stepping into the astrological waters of both Facebook’s Libra project and the Winklevoss Twins’ Gemini exchange and Gemini dollar.
Binance Unveils Its First Crypto Lending Service Launching This Month
Major crypto exchange Binance will launch its first crypto lending product on Aug. 28, 2019.
According to an official announcement on Aug. 26, holders of Binance coin (BNB), Ethereum Classic (ETC) and Tether (USDT) will be able to lend their assets and earn interest through Binance’s new service called Binance Lending.
The services will be available for subscription from Aug. 28 till Aug. 29, Binance noted in the announcement. Lending products will have an initial 14-day period. BNB will have the highest annualized interest rate of 15% while the rates for USDT and ETC amount to 10% and 7%, respectively.
The first interest calculation period will be from Aug. 29 till Sept. 10. Binance added that interest payout time will take place immediately after the loan term matures. The annualized interest rates for upcoming phases will be adjusted based on market reception during this initial phase, the company stated.
Binance Gives An Example:
“If User A subscribes to 10 lots of BNB Lending (total lend of 100 BNB), the interest earned at maturity date will be 0.057534 BNB x 10 = 0.57534 BNB.”
Also today, Binance updated its Lending FAQ by adding a new section “Binance Lending Service Agreement,” claiming that the Binance Lending assets will be used in cryptocurrency leveraged borrowing business on Binance.com.
BitMEX ‘Congratulates’ Binance on Plagiarizing Its Futures Platform Doc
The team at Seychelles-registered crypto exchange BitMEX have accused fellow exchange Binance of plagiarizing BitMEX documents as part of its recent futures testnet launch.
On Sept. 4, the platform published a sarcastic tweet, stating:
“Congrats on the Testnet Futures launches @binance. Glad to see you enjoyed reading our documentation as much as we enjoyed writing it!”
The tweet included screenshots of Binance’s overview of the Auto Deleveraging system for its new futures contracts, in which the text is virtually word-for-word identical to that of BitMEX:
“Just change it a little so it doesn’t look so obvious”
BitMEX CEO Arthur Hayes himself half-jestingly commented on the incident with a meme, insinuating that if you’re in the plagiarism game, you have to at least do it with some finesse:
Arthur Hayes tweets in reference to plagiarism accusations against Binance crypto exchange. Source: @CryptoHayes
The affair quickly drew the involvement of Binance’s own CEO, Changpeng Zhao, who swiftly confessed:
“Shame on us. 😂 Sorry about that. Missed this in the DD process before the acquisition (didn’t read the BitMex docs ourselves). Will fix/remove ASAP.”
CZ’s policy of “owning it” drew virtually unanimous approval on crypto Twitter — with some going so far as to imply that such copy-paste practices are part and parcel of the pressures to rapidly build out new products and services in the fast-growing industry:
One community member’s response to Binance’s plagiarism. Source: @Coinmarketscam
Hayes himself took a conciliatory tone, tweeting to CZ:
The Exchange Business
As reported earlier this week, Binance has just launched two new futures trading platforms in testing mode, having rolled out the platform’s first crypto lending product earlier this month. The full futures platform is expected to launch in September, according to CZ.
This summer, BitMEX‘s Hayes has been fielding allegations from staunch crypto critic Nouriel Roubini, who criticized the exchange’s Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations and even suggested it was violating United States securities laws.
BitMEX is also currently under investigation by the U.S. Commodity Futures Trading Commission (CFTC) over suspicions it has facilitated trading on its platform by U.S. residents.
Early Tester Finds Both Binance Futures Platforms ‘Currently Unusable’
Bitcoin futures offerings from cryptocurrency exchange Binance have come in for criticism as a pre-release tester identifies major flaws.
Rocky Start For Binance PR Move
In a series of tweets on Sept. 6, the account known as doublejump said both the options currently under consideration by Binance lacked basic features, which are essential for ease of use.
As Cointelegraph reported, Binance has released two separate versions of its futures trading platform for testing by users, and plans to reward those who test and correctly vote for the winner.
Platform A came from Binance’s own development team, while Platform B stemmed from exchange JEX, which Binance recently bought.
According to doublejump, however, neither is currently fit for purpose.
“Platform A is unusable because of its contract size granularity, but does have a nice interface and decent specifications otherwise. Platform B is not documented well and has an unwieldy leverage system,” the account summarized.
Competition On The Horizon
Further doubts focused on Binance’s choice of reference for Bitcoin (BTC) exchange rates. Doublejump noted the sources include HitBTC, while others involve Huobi, Bittrex and Binance itself.
While it remains unknown when the futures platform will launch, competition is set to increase this month with the launch of Bakkt’s physically-traded futures.
This week, meanwhile, Binance found itself in hot water after it emerged its futures documentation was copied from an existing offering by derivatives giant BitMEX.
Cryptocurrency Exchange Binance Has Been Awarded An Internationally Recognized Security
Accreditation, ISO/IEC 27001, following two external audits of its information security systems.
The exchange shared news of its accreditation in an official tweet on Sept. 23.
Two External Audits To Secure The Accreditation
The ISO/IEC 27001 standard that underpins Binance’s new accreditation is the international standard that provides the specification for information security management systems (ISMS).
The technology-neutral standard is designed to assist organizations in managing their information security processes in line with international best practices.
To be evaluated for the accreditation, the platform underwent external audits by Norway-based, international accredited registrar DNV GL and by the United Kingdom Accreditation Service.
In its tweet, Binance claimed to be “among the first global crypto-asset platforms to receive ISO27001 accreditation, & the first certified by the DNV & UKAS.”
In sharing Binance’s original tweet, exchange CEO Changpeng Zhao said that the accreditation went towards “setting higher #SAFU standards for our industry” — a reference to the Secure Asset Fund for Users (SAFU) established by Binance in 2018. It provides a form of emergency insurance protection for users and their funds in extreme situations.
Bolstering Confidence After Security Incidents
Binance’s new ISO 27001 accreditation comes following a year of thorny security issues for the platform.
In August, the platform fell victim to a hacking scandal that saw the miscreant allegedly gain possession of a huge portion of the firm’s Know Your Customer data (10,000+ personal photos).
In May, the exchange lost 7,000 Bitcoin (BTC) in a major hack of its hot wallets, worth over $40 million at the time.
Binance Now Accepting Fiat Through Alipay, WeChat
Binance is now accepting fiat through Alipay and WeChat, opening up the exchange to peer-to-peer (P2P) crypto transactions from China. The move follows a September announcement concerning the exchange’s intention to add over-the-counter (OTC) trade options for an additional fiat on-ramp.
Although an expected development, the move was first disclosed on Twitter and later confirmed by Binance CEO Changpeng Zhao on Wednesday. For now, bitcoin-for-fiat trades are only available.
One of the largest social media apps globally, WeChat currently has over 1.1 billion active users according to Statisa. Payment application Alipay has over 900 million users as well, per the China Daily.
Since the 2017 banning of cryptocurrency exchanges by the People’s Bank of China (PoBC), P2P trading has predominated in China. Earlier this year, CoinDesk reported that P2P exchange Hodl Hodl had reconfigured its security preferences to sidestep China’s Great Firewall.
Alipay To Ban All Bitcoin-Related Transactions
Alipay, the digital payment arm of Chinese e-commerce giant Alibaba, has declared that it will be banning any transactions related to Bitcoin (BTC) and other cryptocurrencies.
Combating Illicit Players
On Oct. 10, Alipay reiterated its anti-crypto stance in a Twitter thread, which warned that the company is closely monitoring over-the-counter transactions to identify irregular behavior and ensure compliance with relevant regulations. Alipay wrote:
“If any transactions are identified as being related to bitcoin or other virtual currencies, @Alipay immediately stops the relevant payment services.”
This move follows various reports that Alipay is being used for BTC transactions.
Binance Uses Alipay For Buying Crypto
On Oct. 9, major crypto exchange Binance confirmed on Twitter that it has begun accepting fiat currencies through online payment service Alipay and mobile messaging and payment app WeChat.
Binance CEO Changpeng Zhao, also known as CZ, clarified that the exchange is not working directly with WeChat or Alipay, and users are still able to use them for peer-to-peer transactions.
This announcement followed the implementation of Binance’s peer-to-peer trading for Bitcoin, Ether (ETH) and Tether (USDT) against the Chinese yuan (CNY) earlier, as reported by Cointelegraph.
China’s CBDC plans
Originally founded in China in 2017, Binance made its first strategic investment in Beijing-based crypto and blockchain publication Mars Finance in mid-September. At the time, the crypto community was anticipating the People’s Bank of China to launch its own central bank digital currency (CBDC).
However, in late September, the bank shattered these expectations — claiming that it has no specific launch date for its CBDC and denying that the country is ready to roll out the new financial asset.
Eyeing African Market, Binance Adds Nigerian Fiat-to-Crypto Gateway
Binance has added a fiat-to-crypto gateway for Nigeria’s Niara (NGN), the company said.
Facilitated by payments network Flutterwave, the addition starts a new phase of Binance adding sub-Saharan fiat pairs, the company said in a statement. In “the near future” the high-volume global exchange will also introduce gateways for South Africa’s Rand (ZAR) and Kenya’s Shilling (KES), Binance said.
At launch, Binance limited the Nigerian trading pairs to BUSD/NGN, BNB/NGN and BTC/NGN. Investors can deposit between 150 NGN (about $.40) and 430,000 NGN (about $1,200) for a 1.4% fee, Binance said in a blog post.
Binance said last month that it planned to add fiat-to-crypto OTC trading.
Binance Bitcoin Futures ‘Attack’ Sees FTX Exchange Face $150M Lawsuit
Cryptocurrency derivatives exchange FTX has received a $150 million lawsuit for market manipulation and selling unlicensed securities in the United States. Uploaded to social media by End of the Chain podcast host Samuel McCulloch on Nov. 3, sections of the lawsuit document show FTX accused of “attacking” fellow exchange Binance.
Lawsuit: FTX Had “Manipulative And Deceptive Scheme”
The plaintiff, a mysterious entity known as Bitcoin Manipulation Abatement LLC, is demanding $150 million in exemplary and punitive damages.
According to the plaintiff’s lawyers, FTX used accounts to manipulate Binance’s recently-launched Bitcoin futures in mid-September. The document reads:
“Defendants, and each of them, were caught red-handed when, at about 21:00 EDT on September 15, 2019, and acting in furtherance of the manipulative and deceptive scheme as alleged hereinabove, Defendants, and each of them, made two illicit unsuccessful attempts to manipulate prices of Bitcoin futures listed on Binance cryptocurrency futures exchange.”
The lawyers continue that Binance did not succumb to the attack due to its BTC prices being calculated using an index, securing it from small-scale attempts to move markets in such a way.
“The crux of the plaintiff’s argument is that FTX used its position to manipulate BTC prices using momentum ignition algos, with the goal of creating liquidation cascades,” McCulloch summarized.
Sister Company Ridicules “Nuisance” Lawsuit
FTX has yet to issue a public comment on the proceedings, which come as competitor BitMEX remains in the spotlight over a user data leak last week.
In a blog post on Sunday, Alameda Research, the quantitative trading firm which shares its CEO with FTX, revealed it was also the target of legal action.
“Although we have not been served, a complaint written by a patent lawyer against Alameda has been circulating on the Internet. The nuisance suit is riddled with laughable inaccuracies, including mistaking the entire business model of Alameda,” it stated.
Alameda further alleged it was the target of a smear campaign as its popularity grew:
“It is an unfortunate reality that it is easy to file bulls***lawsuits and annoying to fight them, and some assholes will use this as an excuse to extort anyone they see as high profile.”
Official: Binance Chain and BNB Will Be Traceable via CipherTrace
American blockchain security firm CipherTrace will provide Anti-Money Laundering (AML) controls for Binance Chain and its native asset Binance Coin (BNB).
CipherTrace To Increase AML checks On Binance Chain
Binance Chain, a public blockchain of major crypto exchange Binance and the underlying blockchain for Binance DEX, is expected to improve its AML procedures through CipherTrace, Binance announced on Nov. 5.
Specifically, CipherTrace will be providing Binance Chain with institutional-grade AML controls to increase adoption of the Binance Chain blockchain.
Within the initiative, CipherTrace will enable global developers, investors and regulators to access the Binance Chain blockchain for discovering data such as high-risk addresses.
Moreover, CipherTrace will be helping those entities to set various controls to protect decentralized applications, exchanges or other crypto-based applications, Binance wrote in its blog post.
Customer Data Will Not Be Shared With Third Parties, Binance COO says
Samuel Lim, chief compliance officer at Binance, claimed that the initiative will not affect Binance users’ security and data protection. Speaking to Cointelegraph, the executive noted that customer information will not be shared with third parties as a result of the new AML practice, adding:
“Users can rest assured that Binance will uphold its usual high standards of user security and data protection.”
Lim also denied to specify to Cointelegraph whether this move would affect listing of privacy coins such as Monero (XMR) in the future, saying that Binance does not comment on specific tokens and maintains the highest integrity in its listing due diligence process.
In the announcement, Lim considered the move as a “major win for the community-driven Binance Chain,” noting that Binance users can soon expect more digital token support across its ecosystem.
Meanwhile, online critics have outlined the third party disclosure risks associated with AML practices by companies such as CipherTrace and Chainalysis. Twitter account theonevortex wrote:
“Looking forward to chain analysis companies like @ciphertrace and @chainalysis getting hacked. These people sell your data to 3 letter agencies and governments WITHOUT your permission.”
CipherTrace Recently Expanded Its Platform To Support 700 Tokens
CipherTrace’s support for BNB and Binance Chain follows the recent expansion of CipherTrace services to up to 700 cryptocurrencies including Ether (ETH), Tether (USDT), Bitcoin Cash (BCH) and Litecoin (LTC) on Oct. 15. Claiming that CipherTrace has expanded to support 87% of the transactional volume of the top 100 cryptos, the firm denied to specify which cryptos will not be supported on the platform at the time.
On Oct. 21, CipherTrace CEO David Jevans argued that crypto regulations by global regulators such as those by the Financial Action Task Force’s would trigger a shift of criminal activity from Bitcoin (BTC) to privacy coins.
Binance CEO: New Wallet Security Solution ‘Far Superior’ To Multi-Sig
The CEO of Binance claims that a newly open-sourced solution for wallet providers and custodians is “far superior” to multi-sig security and will reshape the industry. In a tweet published on Nov. 6, Changpeng Zhao linked to a new open-source release from Binance, declaring:
“I believe TSS (threshold signatures scheme) will reshape the landscape for wallets and custodian services. It is far superior to multi-sig.”
Unlike Multi-Sig, TSS Is Implemented Off-Chain
Binance has today released an open-source implementation of its Threshold Signature Scheme (TSS) library for Elliptic Curve Digital Signature Algorithm (ECDSA): in layman’s terms, a new cryptographic protocol for distributed key generation and signing that will reportedly help wallet providers and custodians to avoid single points of failure in private keys within distributed key management.
As The Exchange Explains:
“TSS allows users to define a flexible threshold policy. TSS technology allows us to replace all signing commands with distributed computations so that the private key is no longer a single point of failure.
For example, each of three users could receive a share of the private signing key, and in order to sign a transaction, at least two of the three users will need to join to construct the signature.”
TSS is implemented off-chain, unlike multi-signature protection, thereby using fewer resources and reducing potential attack surfaces.
Binance claims that threshold signatures will mean that a single compromised device won’t put a user’s assets at risk. For business operators, it can help to cement access control policies that purportedly prevent both insiders and outsiders from stealing corporate funds.
More information about TSS technology is available via the Binance Academy, with the open-source code accessible via GitHub.
Cybersecurity Firm Kudelski Appointed As 3Rd-Party Auditor
Binance invited cybersecurity solutions provider Kudelski Security to conduct a third-party audit of the cryptography and code in the Binance TSS library, which reportedly found that “none of the issues found in the frame of this audit could be exploited” to “completely break the security of the scheme, or recover secret data.”
Kudelski entered a strategic partnership with smart contracts auditing firm Hosho earlier this year to combine their skill sets in order to meet the increasingly complex security demands of the blockchain sector.
Binance Enters Indian Market With Acquisition of Crypto Exchange WazirX
Binance has made a move into India’s potentially huge, but troubled, cryptocurrency market with the acquisition of the WazirX exchange platform.
Binance, the top crypto exchange by trading volume, announced the news in a blog post Thursday, but did not provide details of the deal. However, sources of the Economic Times estimated the firm was bought out for $5 million–10 million.
The company’s entry into India might at first glance seem surprising, with the local crypto industry having been greatly disrupted by a ban on banking services for crypto firms instigated by the nation’s central bank in April 2018. Since then a number of local exchanges, including Koinex and Zebpay, have been forced to close, with the remainder moving to survive on crypto-to-crypto trading, and avoiding the fiat system.
That’s a strategy employed by WazirX , which launched earlier this year offering crypto-to-crypto and peer-to-peer trades, says the Economic Times.
Binance, however, has a way round the banking issue, having launched Indian rupees on its Binance Fiat Gateway in recent weeks. Now it says users of WazirX will soon be able to buy the tether (USDT) stablecoin with rupees via WazirX and use USDT to trade any cryptocurrency offered by BInance.com.
“The acquisition of WazirX shows our commitment and dedication to the Indian people and strengthen the blockchain ecosystem in India as well as another step forward in achieving the freedom of money,” said Binance CEO Changpeng “CZ ” Zhao.
There’s another potential hurdle for Binance in India, with a government panel said to be mulling legislation that would ban cryptos completely in the country. It would seem that Binance considers that a risk worth taking and, if the estimated acquisition price is in the right region, it’s likely a small amount for the firm to pay to have a foothold as one of few fiat-to-crypto exchanges in the potentially huge market.
“Building fiat-to-crypto bridges remain a key mission for Binance, and WazirX will help this by providing a simple and cohesive way to purchase cryptocurrencies in a country which is home to more than a billion people,” said Binance CFO Wei Zhou.
Markets Crash After Reports That Binance’s Shanghai Office Closed in Crypto Crackdown
Chinese authorities have reportedly raided and shut down the Shanghai offices of leading cryptocurrency exchange Binance.
Citing unnamed local sources, The Block says that local police have shut down Binance’s offices after raiding the premises. Between 50–100 of the exchange’s employees reportedly worked out of the Shanghai location.
Binance has not responded to Cointelegraph’s requests for comment as of press time.
Closure Follows Crackdown
The purported raid follows a crackdown on cryptocurrency-related businesses and activities in the country.
Recently, financial authorities in China issued a notice to the public, directing individuals to report businesses engaged in virtual asset trading to the Shanghai headquarters of the People’s Bank of China — the country’s central bank. Activities that must be reported include:
“Virtual currency transactions in the territory; the other is to issue ‘xx coins’ and ‘xx’ in the form of ‘blockchain application scenarios.’ Currency, fundraising or bitcoin, virtual currency such as Ethereum; third, providing services such as publicity, diversion, agency trading, etc. for registered ICO projects, virtual currency trading platforms, etc.”
However, Binance told Cointelegraph that the company had not received this notice. Similarly, Beijing-founded Huobi told Cointelegraph that the company was familiar with the notice, but had not received it.
Offices Are An Outdated Concept?
In a move of regulatory arbitrage, Binance opened offices in Malta in 2018 as the island nation ramped up its cryptocurrency-friendly regulatory projects.
Last month, rumors abounded that the exchange was opening offices in the Chinese capital of Beijing, despite the country’s decidedly anti-cryptocurrency stance.
However, according to the firm’s CEO Changpeng Zhao, offices themselves are an antiquated concept. In a tweet on Nov. 19, Zhao said, “Office and HQ are old concepts like SMS and MMS. Time is moving on…”
Markets react with major coins seeing red
Cryptocurrency markets have reacted to the news, with most major coins seeing significant losses on the day.
Bitcoin (BTC) is seeing losses over 6% while leading altcoin Ether (ETH) has lost over 8% in the last 24 hours. Altcoins like Litecoin (LTC) and EOS are taking a beating with over 9% losses, while Binance’s own coin, Binance Coin (BNB), is down 10% at press time to trade at $16.58.
Binance CEO: ‘We Will Be Suing’ The Block Over China Police Raid Story
The CEO of cryptocurrency exchange Binance has vowed to sue industry media outlet The Block over alleged false reporting.
In an ongoing Twitter exchange on Nov. 22, Changpeng Zhao, known as CZ in crypto circles, promised to take legal action over an article that claimed Binance’s Shanghai office was receiving attention from Chinese police.
CZ To The Block: “Own Up And Apologize”
“We will be suing them,” he wrote in one tweet.
The offending piece originally surfaced on Friday and was part of multiple reports of a fresh crypto clampdown by China. At the same time, Bitcoin (BTC) slid to below $7,000.
The Block initially made its claims under the headline “Binance’s Shanghai office shut down following visit by authorities, sources say.”
After a wide backlash over the factual accuracy of the article, during which CZ demanded the publication “apologize” but ruled out court action, The Block released a follow-up piece defending its stance.
This appeared to inflame tensions further, leading CZ to change his mind on the issue, which he originally said would be “a bit too much trouble for now.”
“Instead of apologizing to the community for the fake headline news of the non-existent ‘police raid’, which damaged our reputation, and $btc price, theBlock now tries to argue if there was an office, if CZ had a meeting… who cares? Own up & apologize for your mistake.”
Nonexistent Raids On Nonexistent Offices?
Specifically, CZ took The Block to task over its claims Binance encountered a police raid, and that it even had a Shanghai office at all. The latter issue remains unclear, the publication citing “witnesses” and previous media coverage, which CZ rejected.
Staff nonetheless changed the headline of the original article to remove reference to a “police raid,” instead claiming Binance received a “visit from authorities.” The URL of the article, which is still online, remains in its original form, including the “police raid” phrase.
During the Twitter storm, responses suggested The Block implicated Binance in a crackdown by Chinese authorities in Shenzhen, but that this was erroneous.
“Raided Chinese Exchanges are based in Shenzhen who explicitly dealt with CHINESE customers & involved ponzies. Binance and Bithumb were NOT raided,” content creator Boxmining countered.
Pressure Over $1M+ ‘FUD Fighting Fund’
By press time on Saturday, The Block’s cofounder Mike Dudas had joined in the quarrel with CZ after the latter suggested creating a dedicated fund to combat the practice of spreading so-called “fear, uncertainty and doubt,” or “FUD.”
On Twitter, CZ had seen interest from Justin Sun, CEO of blockchain platform Tron (TRX), and matched his pledge to donate 100 BTC ($716,000) to the fund. For Dudas, this was an attempt at stifling press freedom.
“Two of the wealthiest men in cryptocurrency plan to raise a ‘FUD fighting fund’ worth more than $1 million, presumably to wield as an implicit threat against journalists who report facts that run contrary to their business interests,” he wrote.
Cointelegraph has reached out to Binance for comment but had not received a response by press time.
Binance Returns Frozen BTC After User ‘Promises’ Not To Use CoinJoin
Bitcoin (BTC) users who employ privacy tool CoinJoin to add anonymity to their transactions face a major wake-up call after exchange Binance froze a withdrawal.
In an ongoing Twitter debate which began Dec. 19, a user by the name of Catxolotl uploaded what appeared to be correspondence from Binance Singapore staff stating they had launched an “investigation” into a withdrawal of an unknown amount of BTC.
Binance: We “Do Not Tolerate” CoinJoin
The Reason, They Said, Was Catxolotl Was Using Coinjoin Via Wallet Provider Wasabi. A Binance Representative Confirmed The Problem In Private Comments, Explaining:
“Binance SG operates under the requirements as set forth by MAS and our MAS regulated partner, Xfers. Hence there are AML CFT controls set in place for the Binance SG. Unfortunately, this user has triggered one of our risk control mechanisms and thus we are conducting a deeper investigation.”
CoinJoin refers to a method of grouping together Bitcoin transactions, “mixing” unspent transaction outputs (UTXOs) and hiding who sent what to which address in order to increase all users’ privacy.
According to Binance, including CEO Changpeng Zhao (known as “CZ”), Singapore regulations meant CoinJoin transactions were no longer desirable.
“However, at this juncture, Binance Singapore does not tolerate any transactions directly and indirectly associated with gambling, P2P, and especially darknet/mixer sites,” a subsequent email allegedly reads.
Catxolotl Confirmed He Had Received Possession Of The Funds Following The Debacle:
“Update: I got my sats back, but not without promising Big Brother I wouldn’t mix those utxos. Hope everyone got something out of this.”
Beyond Anyone’s Control?
As neither Binance nor CZ prepared to apologize for what they saw as abiding by local laws, a fierce debate erupted on social media, with well-known Bitcoin figures clashing over the decision to root out transactions with enhanced privacy.
“Some advocate using CoinJoin as a ‘best practice’ but they do not necessarily inform you on the risks,” the @Bitcoin Twitter handle wrote, tagging self-confessed “Bitcoin maximalist” Giacomo Zucco.
The Account Continued:
“FYI, a risk of using CoinJoin is @chainalysis or others will increase your ‘risk score’. @binance & others use these vendors & share data.”
Zucco responded in kind, highlighting the industry’s mixed feelings on what remains a serious challenge as more consumers choose to engage with Bitcoin.
“Some advocate NOT using CoinJoin as a way to please bureaucrats & politicians, but they do not necessarily inform you on the risks,” he wrote.
“FYI, a risk of NOT using CoinJoin is being spied on by everybody, including kidnappers, extortionists, stalkers, competitors & crazy ex-wives.”
The controversy extended to Wasabi and CoinJoin itself. Nicolas Dorier, the creator of open-source Bitcoin payment gateway BTCPay, hit back at suggestions Wasabi could control how its transactions were handled by exchanges.
“Any person saying that @wasabiwallet have any technical way to prevent their users to be harassed by binance is full of sh*t. No coinjoin scheme can prevent this at the moment,” he wrote.
CZ has meanwhile released a dedicated blog post about the nature of the regulations with which Binance is obliged to comply.
Binance US Now Offers Staking Rewards For These Two Cryptocurrencies
Binance US has joined other major exchanges in the staking game, adding staking rewards for cryptocurrencies algorand (ALGO) and cosmos (ATOM).
Announced Wednesday, the exchange said returns will be given on a monthly basis.
ALGO and ATOM are the only proof-of-stake (PoS) cryptocurrencies currently available on Binance US, a California-based licensee of one of the world’s largest cryptocurrency exchanges.
Binance US now joins Kraken and Coinbase in offering staking rewards on PoS coins, though the latter two exchanges only offer staking on Tezos (XTZ).
Binance US currently offers 28 cryptocurrencies on its platform. With U.S. compliance laws remaining a top concern for the Binance offshoot, the firm says it’s waiting for further regulatory clarity on Tezos. Binance US CEO Catherine Coley told CoinDesk the exchange hopes to offer additional staking rewards once more PoS assets are listed.
An expected return per coin was not included in the Binance US announcement. Tezos staking returns on both Kraken and Coinbase run at roughly 6 percent, according to network figures.
An alternative to proof-of-work (PoW) mining, staking encourages cryptocurrency holders to participate in the network by depositing their coins in specialized public addresses. Users compound holdings through disbursed network rewards for verifying transactions while bolstering the network’s overall security.
Launched in September 2019, Binance US was launched to cater to U.S. citizens following Binance proper’s booting of U.S. customers earlier that summer.
Mysterious ‘Binance Cloud’ Launching In 10 Days, CEO CZ Hints
In a wide-ranging ask-me-anything (AMA) on Feb. 7, Binance CEO Changpeng Zhao announced big plans for the cryptocurrency exchange in 2020. One of the most imminent and least explained was the hinted arrival of a new product called Binance Cloud, which will reportedly be unveiled in the next 10 days.
Taking Binance Into The Cloud
Exactly what Binance Cloud might entail was not explained, as Zhao remained tight-lipped during the AMA. However, the company is currently advertising for a Senior Cloud Engineer, to join the Cloud Engineering and Architecture Team.
The position describes “large scale, massive parallel and highly available compute[r] systems on the advanced Cloud Computing platform,” and requires someone who can “improve, scale and automate this business critical Cloud-based architecture.”
How this translates into a consumer product remains unclear, although seemingly the answer is just days away. Zhao followed up the AMA by tweeting a GIF of some clouds, to increase the speculation.
Other upcoming and recent developments
Even before that, we will see BNB futures with 50x leverage launched on Feb. 10. Binance is also adding fiat gateways for currencies including Russian Rubles, Norwegian Krone and Croatian Kuna, with cryptocurrency purchases already available with Russian credit cards.
As Cointelegraph reported, WazirX, the Indian cryptocurrency exchange acquired by Binance, also recently held a successful Initial Exchange Offering, also known as an IEO, for its WRX coin through Binance launchpad.
Continuing Its Crypto Market Takeover, Binance Fires Up BNB Futures
Crypto exchange unicorn Binance will launch Binance Coin (BNB) futures trading on Feb. 10.
As the 17th cryptocurrency available on Binance’s futures trading branch, BNB comes with 50x leverage, paired against Tether’s USDT stablecoin, Binance detailed in a Feb. 7 press release provided to Cointelegraph.
BNB Pumped With The Rest Of The Market
Binance’s BNB coin has already rallied several dollars this month, hitting a price of $22.16 by press time. Cointelegraph analyst and trader Keith Wareing sees upcoming demand for the BNB asset itself.
“Looking at trading volumes on Binance, it’s clear they don’t have to sell any of their s***coin for revenue,” Wareing said in a Telegram message, adding:
“As such, during the forthcoming bull run, their position as one as one of the most trusted and secure exchanges in the space guarantees to add demand to the BNB token, so I expect it to outperform all other top 10 assets if the Bitcoin bull run continues.”
Digital asset trader and social media personality Crypto Dog suggested it was pro-BNB in a Feb. 7 tweet, saying, “Anybody else like BNB?” The crypto-Twitter crowd posted a mixed bag of positive and negative reviews in response.
Binance Grew Quickly
Binance got popular quickly after its 2017 launch. By summer 2018, the exchange saw more than $1 billion in single day trading volume. Binance shortly after collected $78 million of profit in the first quarter of 2019.
The business continued its expansion throughout the first half of 2019, funneling millions of dollars in volume through its Binance Launchpad for various initial exchange offerings, or IEOs.
Several months prior to its futures trading platform launch, however, Binance banned U.S. customers. Since the ban, the exchange has opened up a U.S. branch, as well as grown its futures trading platform, hosting Bitcoin futures with 125x leverage, which is substantively faster than others.
This new offering comes on the heels of releasing Zcash (ZEC) futures trading earlier this week.
Binance Cloud To Allow Users To Launch A Crypto Exchange Within 5 Days
Binance’s newly released Binance Cloud platform might be somewhat different from what the crypto industry expects the new feature to be.
After Binance founder and CEO Changpeng Zhao (CZ) first hinted at the introduction of Binance Cloud on Feb. 8, the new service has been officially released on Feb. 17, targeting users willing to set up crypto exchanges, according to a blog post by Binance.
All-In-One Infrastructure For Launching A Crypto Exchange
According to the announcement, Binance Cloud will serve as an all-in-one infrastructure platform for customers and partners to launch digital asset exchanges based on Binance’s industry-leading technology, security, liquidity as well as custodial services.
The solution also supports dashboard for managing funds, multilingual functionality, as well as a range of trading pairs and coin listings.
The Binance’s new exchange-specific cloud solution will provide users with a method of setting up a crypto platform in their local markets. Binance Cloud’s features include crypto spot market and futures trading as well as local bank API integrations and peer-to-peer exchange services from fiat to crypto, the announcement notes.
In the future, Binance Cloud plans to add more features like staking, over-the-counter trading services as well as token issuance with initial exchange offering platform.
CZ Says That Binance Cloud Will Allow Users To Launch An Exchange Within Three To Five Days
Speaking about Binance Cloud in an interview with Cointelegraph, CZ outlined that the new service will particularly target people in regions that are not yet covered by Binance. CZ said that Binance Cloud will allow those people to run their own exchanges in local markets that are far from Binance “both fiscally and also culturally or just knowledge-wise” to date.
The Binance CEO also told Cointelegraph that Binance Cloud would allow any partner to launch an exchange within three to five days in case if “other preparations are in order.” According to the original announcement, the first major digital asset exchange fully powered by Binance Cloud will launch in early March 2020.
Binance Cloud Comes In Line With Binance’s Mission To Unlock Crypto For Everyone
CZ Also Pointed Out That Binance Cloud Is The First Initiative Of Its Kind, Claiming:
“Binance Cloud is a product suite previously missing from the market […] We are eager to share the quality experience of Binance through different brands, communities, and markets globally.”
Speaking to Cointelegraph, CZ was unsure of who had initially conceived the idea of Binance Cloud, beyond the fact that it was not him. The Binance CEO added that the origin of the idea is not as important as execution. CZ stressed that Binance Cloud aims to enable everyone to access crypto and contribute to global adoption. CZ said:
“We want to enable more of our partners to access crypto, so that other people can do this together with us in enabling people to access crypto. So the concept behind Binance Cloud is that we want to provide a platform where other people can help us enable access to crypto. So that’s really the idea behind it.”
The news comes amid a recent report claiming that Binance has applied for a license to operate in Singapore. Originally based in Malta, Binance will now purportedly expand its regulatory compliance by acquiring a license from the Monetary Authority of Singapore.
On Feb. 16, Cointelegraph published an interview with CZ, in conjunction with the CEO winning the top position in the Cointelegraph’s first-ever Top 100 list.
White Label Exchange Provider AlphaPoint Raises $5.6 Million
New York-based white label exchange provider AlphaPoint has raised a further $5.6 million from investors to help scale its exchange technology.
AlphaPoint’s tech is currently used as the backend for 150 exchanges across 35 countries, servicing more than a million end users. The funding will be used for platform development and to roll out more sophisticated exchange features like margin trading, integrated advanced brokerage capabilities, and better liquidity solutions.
Co-founder And CEO of AlphaPoint Igor Telyatnikov Said These Features Are Just The Tip Of The Iceberg:
“Stay tuned in 2020 as we will soon announce the release of a series of new liquidity, leverage, and lending products and solutions to our customers.”
Two Year Gap Between Funding Rounds
This latest funding round comes two years after AlphaPoint drew in $15 million from Mike Novogratz’s Galaxy Digital Ventures in 2018 to grow its standing as a digital asset marketplace. In total, the company has raised $23.9 million since it was launched in 2013.
Telyatnikov described the infusion of capital as an effective short-term solution for their current needs:
“This capital injection enables AlphaPoint to continue delivering on our mission to enable access to digital assets globally. We are still in the early days of adoption and utilization of blockchain technology.”
Fresh Blood At AlphaPoint
The company is also adding two new members to their board of directors and advisory board. Tim Scheve, President and CEO of Janney Montgomery Scott, will join AlphaPoint as an advisor alongside Jan Mayle, founder and CEO of The Mayle Group.
Binance Announces CoinMarketCap Acquisition, CZ Gives The Scoop
While global markets are experiencing tough times amid the coronavirus pandemic, the crypto industry is getting stronger as its core players have tapped one of the biggest crypto mergers in history.
Binance, the world’s biggest cryptocurrency exchange, has reached an agreement to acquire CoinMarketCap, one of the most-referenced crypto data websites, in an undisclosed deal. The companies officially announced the acquisition to Cointelegraph on April 2.
Changpeng Zhao, founder and CEO of Binance, said that Binance and CMC are very similar, as they are both providers of “access-to-crypto” and share a vision of making crypto assets more accessible and useful for people around the world. Zhao said:
“The acquisition will enable us to build on each other’s strengths, and further grow and instill transparency in the industry.”
Zhao told Cointelegraph that the company has been in talks with CMC for a few months before closing the deal in April. While the acquisition is rumored to have cost Binance $400 million, Zhao said that the company cannot disclose the amount of the deal, as it is protected by a non-disclosure agreement.
CMC Will Operate Independently
While the companies are going to work closely together, CMC will still continue to operate as an independent business entity, both Binance and CMC emphasized. Zhao stressed that the acquisition will not change CMC’s independence from external stakeholders:
“Binance has no bearing on CoinMarketCap rankings. CoinMarketCap stays committed to providing the most accurate, timely and quality cryptocurrency data in the industry while benefiting from Binance’s expertise, resources and scale.”
However, CMC will immediately undergo some internal restructuring as part of the deal. Brandon Chez, CMC’s founder, will be stepping down as CEO and will be replaced by CoinMarketCap’s current chief strategy officer, Carylyne Chan, as interim CEO.
Apart from the reshuffle, CoinMarketCap will not see any changes in its team in the near future, or at least the next couple of months. Chan told Cointelegraph:
“Other than that, there won’t be any other major team changes at CoinMarketCap. Everyone is going to stay on and everyone is really excited about what’s happening. […] I think that no other major changes that we see, definitely not in the next couple of months.”
CoinMarketCap To Remain Neutral Regarding Project Listings
According to Chan, Binance did its best to ensure that CMC can continue to adhere to its own listing methodology. The interim CEO told Cointelegraph that the firm is not planning any sufficient listing changes anytime soon:
“We’ll stick to our listing requirements and make sure that everything is fair and unbiased to anyone who wants to list anything on CoinMarketCap. So that will be our firm commitment that […] will not change following the acquisition.”
So, What Does This Acquisition Really Mean?
While CMC will continue to operate independently to ensure neutral and transparent data, Binance will be contributing significantly to CoinMarketCap’s further development and projects in 2020, Chan noted.
The exchange, which has at least 800 employees worldwide, is expected to share its expertise in a number of areas like finance and security. Chan highlighted that the acquisition will help CMC evolve:
“We are going to get a lot from Binance in terms of understanding how they’re running a better team in terms of best practices. I think there are some really basic things around security, finance that we will learn from Binance just based on the fact that they have a way larger team than us and have scaled out much more efficiently.”
The CMC acquisition comes about six months after industry reports claimed that CoinMarketCap was “entirely bootstrapped” — i.e., continuing its operations with minimal financial resources. In October 2019, Chan reportedly said that CMC did not plan to raise any funds soon and was continuing “bootstrapping and scaling.”
CZ Says Binance Invested One Quarter of Its Profits Last Year
The chief executive of major cryptocurrency exchange Binance, Changpeng Zhao — often known as CZ — has revealed that the firm diverts a quarter of its profits into investment opportunities.
Zhao’s comments follow Binance’s completion of several recent high-profile acquisitions — including crypto data site CoinMarketCap and Indian crypto exchange WazirX.
In a recent interview with South China Morning Post, Zhao estimated that Binance reinvests roughly 25% of its annual profits into expansions and acquisitions.
“We usually spend about a quarter of our profit on investment opportunities every year,” Zhao said, emphasizing that Binance is currently looking to grow its portfolio of businesses “beyond just trading.”
With Binance estimated to have netted roughly $550 million in profits during 2019, the exchange is likely investing in excess of nine-figures annually.
Binance Secures High-Profile Acquisitions
The exchange has aggressively expanded its fiat gateways in recent months, currently supporting crypto purchases with credit cards in over 50 jurisdictions.
Zhao stated that Binance is “interested in exchanges that have existing banking relationships, which enable them to accept trading in local fiat currencies.”
In November, Binance acquired Indian cryptocurrency exchange WazirX to launch a fiat gateway for cryptocurrency purchases in Indian rupees. The decision turned out to be well-timed, with India’s Supreme Court repealing a ban on banks providing financial services to crypto businesses several months later.
At the start of April, Binance also acquired the popular market data provider and long-term crypto mainstay CoinMarketCap for $400 million.
Binance Rivals Bitmex For Top Derivatives Exchange By Volume
In addition to fiat gateways, Binance has also introduced a 125x futures platform.
Despite volume collapsing during the March 12–13 crash on Binance’s futures exchange, open interest has since recovered to the platform’s pre-crash levels.
Although Binance is a relative newcomer to the derivatives sector, the exchange has quickly captured significant market share — vying with BitMex for the title of the top platform by volume.
After Steem Voting Controversy And Hardfork, Binance Lists HIVE
Binance has launched support for HIVE the month after the exchange participated in a controversial governance vote that sparked the Steem hard fork.
In response to customer demand, leading cryptocurrency exchange Binance launched trading support for the community-led Steem (STEEM) hard fork Hive (HIVE) on April 27.
HIVE can now be traded against Bitcoin (BTC), Tether (USDT), and Binance Coin (BNB), however, withdrawals and deposits will not go live until April 29.
While Huobi’s recently introduced support for HIVE skyrocketed the token’s price over 600% in three days, Binance’s announcement appears to have resulted in a bearish pull-back — with HIVE dropping 20% from $0.95 to $0.75 over the past 11 hours.
Binance Lists HIVE After Voting Controversy
The announcement comes the month after Binance and Huobi mobilized customer funds to support Tron founder and new Steemit Inc owner Justin Sun’s apparent attempted takeover of the Steem network — ousting Steem’s block validators in favor of Sun.
However, the exchanges claimed that they were misled by Justin Sun as to the nature of what they were voting on, and quickly withdrew their votes. CZ claimed that he had been made aware of an upcoming upgrade that he had supported.
In Later Statements, CZ Admonished Sun, Saying:
“Justin didn’t talk to me about it actually. My internal team said it was a necessary network upgrade, so I said go ahead. There are network upgrades all the time, and we are always supportive.”
CZ continued, saying: “I told him already directly, explain what you are trying to do to the community and get support first, then do it. Transparency works.”
Apparent Takeover Sparks Resignations From Steem
In an interview with Cointelegraph, OpenOrchard CEO and former Steemit Inc head of communications, Andrew Levine, stated that the situation where Huobi and Binance supported Sun’s takeover comprised the catalyst for his resignation.
“It became intolerable once we saw what happened with the exchanges. That was a black swan event for us,” Levine said, continuing:
“When I saw that the exchange had gotten involved in governance and not just one exchange, once we saw that, it really shattered our conception of the blockchain space. It really had a massive impact on us.”
Former Steem Developer Is Willing To Put Past Behind Him
When Asked How He Would Feel About HIVE Being Listed On Huobi And Binance, The Developer Said:
“I have no problem with Hive being listed on those exchanges — you always want your tokens on exchanges, there are customers there, there are people who want your token — you want your users to have options.”
Levine noted that the situation comprised an “extremely rare event,” also acknowledging that Steem’s “confusing” Delegated Proof-of-Stake governance model played a part in facilitating the takeover. He said:
“When you have exchanges out there where the executives are overseeing hundreds of tokens, each with their own crazy governance models, it should have been taken into account at launch, ‘hey, people aren’t going to understand the nuances of this.’”
CZ Blames ‘Self-Perceived Competitors’ For New DDoS Attacks On Binance
The world’s largest crypto exchange, Binance, faced a series DDoS attacks on its Chinese domains on April 29.
The world’s largest cryptocurrency exchange, Binance, has faced a series of distributed denial of service, or DDoS, attacks on its Chinese domains earlier today.
Binance CEO and founder, Changpeng Zhao, or CZ, tweeted about the attacks on April 29. He explained that the DDoS attacks caused “some lag and interruption of network access.” Binance CEO reassured that there is no need to be concerned, noting that systems are stable and user funds are safe.
Binance co-founder Yi He Reportedly Alerted The Issue Earlier Today
In the tweet, CZ also suggested that the new DDoS attacks on Binance were triggered by “self-perceived competitors.” He wrote:
“Based on the attack pattern, it looks like work of our self-perceived competitors.”
CZ subsequently tweeted that Binance has white hackers that work on internal testing to maintain security of the platform. In response to a tweet noting that global tech giants like Google and Facebook hire such hackers to find loopholes in their security systems, CZ wrote:
“We of course do. We also have self-perceived “competitors” doing testing for us. Everyone is working on Binance.”
According to a report by crypto news agency, CoinNess, the DDoS attack was first flagged by Binance co-founder, Yi He, early in the day. Binance appears to have made no official statement on the matter as of press time.
Binance declined to provide more information about the attacks to Cointelegraph.
The news follows DDoS attacks on major crypto exchanges, OKEx and Bitfinex. As reported, both exchanges experienced multiple DDoS attacks in February, causing some major system outages. OKEx CEO, Jay Hao, subsequently blamed unnamed competitors for the attack. The platform reported that the DDoS attacks were “properly handled within a short period of time and no overseas client is impacted.”
As reported by Cointelegraph, the attacks on OKEx and Bitfinex in February could possibly be related.
Is Binance Getting Too Big? CZ Responds
In an exclusive interview with Cointelegraph, Binance founder CZ responded to concerns about the size of his company.
Cointelegraph conducted an exclusive interview with Binance founder and chief executive, Changpeng Zhao, or CZ, during Virtual Blockchain Week.
During the discussion, CZ addressed concerns from the crypto community regarding the size and influence of Binance amid the firm’s increasing acquisitions and horizontal expansions.
CZ: ‘The Free Market Works’
On the topic of Binance’s increasing presence within the crypto ecosystem, CZ stated: “I think basically there’s two sides to it.”
“So there’s the worry about are we too big or not, and then there is why are users choosing us? If we abuse the power that we have, and then abuse our influence, then people would not choose us.”
“So we are quite big, but the reason we’re growing is not because we are abusing a monopolistic power,” he stated, adding: “There’s like thousands of other exchanges, the competition is very fierce.”
“People naturally have those kinds of worries. But rest assured, we want to continue to provide value to his users, not destroy value. And the free market works — if we abuse it, people will leave.”
Binance Is ‘Tiny’ Compared To Tech Giants
CZ also asserted that “Binance is still very small, stating: “in terms of market cap compared to any traditional organization, we are tiny.” He continued:
“Even in terms of the number of users where we’re tiny as well — all of the crypto users combined is like one one-thousandth of traditional populations, and there are much larger organizations which take one-third of the population, like Facebook.”
“In a free market, […] people will naturally gravitate toward the guys who are providing better products, better services,” he concluded.
‘Sometimes You Get Lucky’
During CZ’s fireside chat with the hosts of Virtual Blockchain Week, CZ stated that he never expected to ascend to comprise the top-ranked crypto exchange so quickly — with Binance having risen to become the largest exchange by trade volume within six months of its launch in 2017.
CZ stated that when the platform launched, there were “only two crypto-to-crypto exchanges that were big at the time — they were only English, and only on the web.” With no mobile apps and no major exchanges targeting users outside of the West, CZ stated that he “thought there was definitely room for another exchange.”
“At the time, our goal was ‘let’s try to reach number one in three years’ […] But y’know, sometimes you get lucky.”
Why Binance’s New Debit Card Fails To Fulfill Satoshi’s Vision
Binance’s debit card process makes it a more of a centralized bank-like institution than the decentralized tech dreamed by Bitcoin’s creator.
Satoshi Nakamoto years ago envisioned an ecosystem that would be independent of the centralized financial system that dominates the global economy today.
His creation sparked a global community of enthusiasts and an entire industry surrounding blockchain — the solution enabling individuals to turn their money away from centralized legacy institutions and toward transacting on a decentralized, distributed ledger. The ultimate goal was a world in which people could pay for goods and services with these novel financial instruments.
Many payment companies and exchanges already claim to offer services that enable crypto users to buy goods and services with cryptocurrency.
Upon further analysis, however — like with Binance’s new debit card offer — it’s clear their crypto payment solutions don’t deliver on the blockchain, adding more intermediaries and opening users to the same harm that could befall them digitally using traditional payment methods.
How The Crypto Payment Process Works
Currently, there are two mainstream methods of processing a cryptocurrency-fiat transaction. One method involves the intermediary accepting cryptocurrency and converting it into fiat at a locked-in, instantaneous exchange rate and then delivering fiat to the merchant or vice versa.
The second method involves first liquidating the user’s crypto into fiat in the user’s account before it reaches the intermediary and then sending the fiat payment to the intermediary to complete the transaction. The first method takes place on the blockchain, while the second does not.
Numerous payment platforms offer one of the two aforementioned types of transactions. Even the giants are mulling over jumping into the game. PayPal has weighed the idea lately of offering crypto payments to consumers, which could lead the way to increased stabilization of the volatility often associated with Bitcoin (BTC) and other cryptocurrencies.
But it remains to be seen exactly how these payment providers plan to process the transactions — whether they would technically allow consumers to pay in crypto or in fiat on or off the blockchain. That’s an important difference to crypto users.
What Crypto Users Want, And What Binance’s Card Offers
Crypto enthusiasts, as well as regular consumers who like to pay in crypto, value the secure nature of blockchain, which, on top of the clear security benefits, doesn’t include the hidden administrative feeds that credit cards do, such as chargebacks or non-purchase credit card fees.
There are also personal reasons consumers choose to purchase with crypto: the advantage of having full control of their money on a blockchain, an element that is arguably missing from non-blockchain means of storing or transferring financial assets where banks have control.
This is the foundation and spirit of cryptocurrency ownership for many crypto users. Some crypto payment solutions available to crypto users, however, have diminished this foundation by the way in which they execute transactions.
Most recently, Binance announced a partnership with Swipe, in essence acquiring the company. Through the acquisition, Binance account holders can now be issued a Binance-branded Visa card. Binance’s Changpeng Zhao, also known as CZ, explained:
“To achieve our mission of making crypto more accessible to the masses, off-ramps are a key component as well. By giving users the ability to convert and spend crypto directly, and have merchants still seamlessly accept fiat, this will make the crypto experience much better for everyone.”
According to the company’s marketing, the card can then be used to purchase goods or services from merchants that accept Visa, giving the impression that the consumer is paying the merchant with cryptocurrency — but there’s a catch.
Upon deeper analysis, it’s clear the account holders are not really buying anything with cryptocurrency nor are they making the purchase on the blockchain. This payment method only makes it appear as though the consumer is paying using cryptocurrency. In actuality, the charge is to the customer’s fiat account.
A source close to Binance explained that if the fiat account is empty, Binance’s system converts cryptocurrency from the user’s crypto account into fiat currency.
The converted fiat currency is then deposited into the fiat account and used to make the purchase with the Binance debit card. In the transaction, Binance sends the converted fiat currency to the card company to complete the payment process. So, technically, the payment never truly involves paying with crypto or on the blockchain.
Why Binance’s Card Offer Causes Crypto Contradiction
There are two conceptual problems here. First, the crypto liquidation process into fiat currency through Binance, which is similar to banking mechanisms, is out of the control of the user, negating the foundational spirit of owning cryptocurrency instead of holding cash at a bank — not to mention the unnecessary redundancy it creates by adding Binance, Swipe and Visa as additional intermediaries in the transaction process.
Second, by sending the payment through traditional credit card rails that are not on the blockchain, the user loses the security benefits of paying on the blockchain. Essentially, the whole process places Binance in a sort of bank-like position rather than a facilitator of payment between the user and the merchant, which is what Visa or Mastercard serve in this example.
To satisfy the crypto community’s hunger for a truly decentralized digital currency, users need to know they are paying in crypto, and not be deluded by the promise of it. This means crypto payment platforms need to ensure they are accepting the payment as crypto and not converting the crypto to fiat before sending payment to merchants — an act that undermines the element of transaction transparency to the user.
The most cryptocurrency-user-friendly approach would involve accepting cryptocurrency and instantly locking in a rate that the user will see before paying. Such a mechanism would restore transparency and grant the user full control of the digital currency, while also ensuring that the transaction stays on-chain, thereby reaping its benefits.
These may seem like negligible details, but to a cryptocurrency owner, it can make a world of difference.
The entire reason for which users get into crypto revolves around control of the currency and the multitude of benefits of running transactions on a blockchain for both the consumer and merchant. For exchanges and crypto payment providers, the key is to stick to the crypto and blockchain way, rather than creating an illusion. This is true to Satoshi’s vision.
Binance CEO Denies Allegations That The Exchange’s US Arm Is A Regulatory Decoy
“Binance has always operated within the boundaries of the law,” said CZ.
Changpeng Zhao, CEO of Binance, is pushing back hard against allegations that the crypto exchange set up its U.S. arm to circumvent regulations and surreptitiously profit from investors.
According to an Oct. 29 article from Forbes writer Michael Del Castillo, the news outlet claims to have obtained a leaked presentation outlining Binance’s plans for operating in the United States. The document states that in 2018 — prior to the launch of Binance.US — the crypto exchange intended to set up a “Tai Chi entity” in the U.S. to act as a type of regulatory lightning rod protecting its main operations from enforcement.
“While the then-unnamed entity set up operations in the United States to distract regulators with feigned interest in compliance, measures would be put in place to move revenue in the form of licensing fees and more to the parent company, Binance,” stated Castillo. “All the while, potential customers would be taught how to evade geographic restrictions while technological work-arounds were put in place.”
In a response made roughly an hour after the article’s publication, Changpeng Zhao, or CZ, disputed many of the claims, stating that the source — the leaked document — was “not produced by a Binance employee.” Castillo believed that former employee Harry Zhou created the presentation.
“Binance has always operated within the boundaries of the law,” stated the CEO. “We do not acknowledge the alleged document.“
CZ claimed that the fact the firm has opened exchanges in several countries is evidence it is willing to comply with regulatory framework “with proper licensing and applications” and stated Binance “has very strong collaboration with many notable law enforcement agencies worldwide.” He said Binance’s operations in the U.S. have “very strong restrictions and operating procedures in place.”
However, the Forbes report described parallels between this Tai Chi plan purportedly conceived in 2018 and the trajectory of Binance.US, which launched in September 2019. The exchange currently operates in 40 U.S. states.
Castillo stated the document suggested the business entity participate in the U.S. Department of Homeland Security Cornerstone Program for detecting weaknesses in the financial systems to “distract” agencies including the U.S. Treasury Department’s Financial Crime Enforcement Network, or FinCEN, and Office of Foreign Assets Control, or OFAC, the Securities and Exchange Commission, or SEC, the Commodity Futures Trading Commission, or CFTC, and the New York Department of Financial Services, or NYDFS. According to Forbes, Binance’s United States arm did so.
The ownership structure of Binance.US, operated by BAM Trading Services in San Francisco, is also somethingof a mystery.
CEO Catherine Coley has claimed there are no ownership ties to Binance — CZ himself called Binance.US “a standalone marketplace” — but Castillo reported the leaked document stated BAM would continue to “license trading and wallet technology” from the crypto exchange.
The presentation also purportedly called for the business entity to use virtual private networks, or VPNs, to obscure the locations of crypto traders and bypass existing regulations. Citizens living in ten U.S. states can not legally use Binance.US at the time of publication, yet Binance Academy has a beginner’s guide to VPNs on its website. CZ has also advocated for the technology on Twitter.
Responding to the claims on Twitter, CZ stated “Anyone can produce a ‘strategy document’, but it does not mean Binance follows them.”
Binance Recovers $344K From Scam DeFi Project Launched on Its Platform
Cryptocurrency exchange Binance says it has successfully followed the money trail left by the operator of a scam decentralized finance (DeFi) project and recovered nearly all the stolen funds.
* In an announcement provided to CoinDesk on Thursday, Binance said it has gained custody of an estimated 99.9% of $345,000 worth of cryptocurrency stolen by purported automated market maker Wine Swap in October.
* Having raised the funds at launch on Binance Smart Chain in October, the operator fled with users’ cryptocurrency “within an hour,” Binance said.
* The so-called exit scam was executed by moving the 19 different cryptocurrencies held in Wine Swap’s address “0xa1eaB5F255DD77fED0D8ea81748422ca7ab0eDc4” to a personal address belonging to the bad actor: “0x4BA023aA9196a354C008aD595F67e268420b7005”.
* The various coins were moved via cross-chain transfers from Binance Smart Chain to Binance Chain and then to Ethereum, according to Binance.
* A small portion of the funds was moved to two exchanges, as well as Binance Bridge, a service that provides access to inter-blockchain liquidity for decentralized applications on Binance Chain and Binance Smart Chain.
* The Binance said its security team closely followed the transactions and managed to identify the malicious actor. By then, the scammer had nearly converted all of the funds into stablecoins, as well as Binance coin (BNB), ether (ETH) and Chainlink’s LINK token.
* After being contacted by Binance, the scammer returned the funds to the exchange.
* “Analysis of the transfers to and from Wine Swap allowed us to identify which addresses fell victim to the scam and calculate exactly how much was owed to them,” the exchange said.
* Binance now plans to refund the victims’ addresses “within the next several days.”
* Binance had seen some criticism over the fact that the scam project was launched on its platform.
CoinDesk asked the exchange if it had reported the scammer to law enforcement, but a reply hadn’t been received by press time.
Crypto Exchange Binance Says Its Systems Are Under Stress
Binance, the world’s largest cryptocurrency exchange by volume, said a rush of new users put its systems under stress, forcing it to briefly suspend withdrawals.
Chief Executive Officer Changpeng Zhao said that user sign-ups and trades jumped to a record high. Crypto prices surged on Friday after Tesla Inc. founder Elon Musk added a reference to Bitcoin to his Twitter profile and posted a mock magazine cover of a whippet in a red sweater, which users interpreted as a sign of support for Dogecoin.
“We almost ran out of DOGE coin addresses,” Zhao told Bloomberg. “Our system couldn’t generate new addresses fast enough to match new users coming in. It’s crazy.”
Binance’s corporate Twitter account later posted that all backlogs had been cleared and withdrawals were back to normal.
Customer funds were safe and kept in the Secure Asset Fund for Users, an emergency insurance fund stored in a separate cold wallet, Binance said. The exchange allocates 10% of all trading fees received into the fund as a way to protect client money in extreme cases.
Binance Faces CFTC Probe Over US Customers Trading Derivatives
The agency hasn’t accused Binance of any wrongdoing, according to the Bloomberg report.
Binance is being investigated by the Commodity Futures Trading Commission to determine if U.S. residents traded derivatives on the cryptocurrency exchange in violation of U.S. rules, Bloomberg reported.
Binance hasn’t been accused of any wrongdoing and the CFTC may not bring an enforcement action, according to the report, which cited people familiar with the matter. Bloomberg also did not outline a time period for this alleged trading.
Spokespeople for Binance and the CFTC did not immediately return requests for comment. However, in a tweet posted after Bloomberg’s report ran, the exchange’s founder and CEO, Changpeng Zhao, appeared to call the report “FUD,” using an acronym for “fear, uncertainty and doubt” that is often used to refer to unwelcome news in the crypto industry.
The news comes a day after Binance announced it has hired Max Baucus, a former U.S. senator and ambassador to China, as a policy adviser who would be able to navigate the exchange’s relationship with U.S. regulators. Baucus currently operates a consulting business.
Binance does not directly serve U.S. customers on paper, instead using a San Francisco-based entity operating as Binance.US for that purpose. Despite this, the parent exchange has announced at least twice in two years that it would be removing all U.S. customers from its platform.
The probe is another sign regulators are trying to funnel U.S. investors into regulated channels.
Derivatives trading in the U.S. is strictly overseen by the CFTC. The agency brought an enforcement action last year against BitMEX, also on allegations it allowed U.S. customers to trade derivatives products. That case, which is also being pursued by the Department of Justice, is ongoing.
Binance Launches Tradable Stock Tokens In Tesla
As distinct from traditional shares, a stock token can be fractionalized into smaller, more affordable units, meaning that more users can potentially benefit from capital returns on equities.
Cryptocurrency exchange Binance is launching tradable stock tokens that aim to enable a wider section of the public to pocket capital returns on equities, including potential dividends, without having to purchase full, traditional shares.
The first publicly tradable equity in the form of a Binance stock token will be Tesla, the share price of which currently hovers around the $700 mark. Rather than purchase a full, traditional share, for which custody of a physical share certificate is required, users can purchase as little as one one-hundredth of a Tesla share represented by a digital token. Binance stated:
“Each digital token represents one share of equity stock and is fully backed by a depository portfolio of underlying securities that represents the outstanding tokens. Users will be able to trade fractional tokens.”
One one-hundredth of a stock token, therefore, represents the same fraction of a Tesla share, and stock prices will be settled in Binance USD (BUSD), a stablecoin pegged to the United States dollar and issued by Paxos Trust Company. Stock tokens are not redeemable for shares.
Binance CEO Changpeng Zhao believes that digital stock tokens will provide a bridge between traditional and crypto markets and broaden access to equity markets, resulting in a “more inclusive financial future.”
Trading of the digital stock tokens will be commission-free, and the product has been developed together with licensed German investment firm CM-Equity AG and the Switzerland-based asset tokenization platform Digital Assets AG. Participation in their trading is not open to restricted jurisdictions such as China, Turkey and the United States, and a Know Your Customer process must be completed to become eligible as a digital stock token trader on the exchange.
Binance’s Q1 2021 has been a strong one, according to an announcement on Monday, with 260% growth in traded volume and a 346% increase in users. Meanwhile, the exchange’s native token Binance Coin (BNB) has rallied by more than 900% so far this year.
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