In the world of cryptocurrency, there is a name that everyone knows: Binance. As the world's largest cryptocurrency exchange by trading volume, Binance is not only the first choice for many investors, but also a benchmark in the industry. However, this legendary platform, known as the "largest exchange in the universe", has a story of ups and downs behind it.
Original intention: starting from China and making a name for ourselves
⭐ Founding background: Binance was founded by Changpeng Zhao (CZ) in China in 2017. Prior to this, Changpeng Zhao had accumulated rich experience in technology and finance. He served as the technical director of the Tokyo Stock Exchange, responsible for the development and maintenance of trading systems. Later, he joined Bloomberg as a development engineer for high-frequency trading systems, providing solutions for institutional clients on Wall Street.
⭐ Founding Motivation: Zhao Changpeng encountered Bitcoin in 2013 and was deeply inspired by the idea of decentralization. He saw the drawbacks of the traditional financial system and the potential of blockchain technology. In 2015, he joined the blockchain startup OKCoin, further delving into the cryptocurrency field. In 2017, with the rise of the ICO boom, Zhao Changpeng realized the enormous demand for efficient and user-friendly trading platforms, and thus decided to establish Binance.
⭐ Market Environment: The market environment at the time was filled with opportunities and challenges. On one hand, the cryptocurrency market was rapidly expanding, with Bitcoin's price reaching new highs, attracting a large number of new investors; on the other hand, many trading platforms faced technical and security issues, resulting in poor user experience. Zhao Changpeng seized this market gap, focusing on providing fast, secure, and convenient trading services for global users.
⭐ Rapid Rise: Binance successfully raised $15 million by issuing its own platform token BNB. This funding provided strong support for the platform's technological development and market promotion. At its inception, Binance quickly attracted users with its unique advantages:
High-Speed Matching System: Binance's trading system can process 1.4 million transactions per second (TPS), which was an industry-leading technological level at the time.
Multi-Language Support: Binance offers versions in multiple languages, including English, Chinese, Korean, Japanese, etc., quickly attracting global users.
Extremely Low Trading Fees: Binance starts with a trading fee rate of 0.1% and allows users to pay trading fees with BNB, further reducing costs.
➡️ Core Achievements: With these core competitive advantages, Binance quickly ranked among the top three cryptocurrency exchanges globally within just six months, laying a solid foundation for its subsequent global expansion.
Going Global: Transformation Driven by Policy, Achieving Global Layout
🔑 Policy Driven: At the end of 2017, the Chinese government imposed a ban on ICOs and cryptocurrency trading, forcing Binance to move its business abroad. This 'forced' choice laid the foundation for its globalization strategy.
🔑 Global Layout: Zhao Changpeng quickly adjusted the strategy, moving the company to crypto-friendly regions such as Japan, Malta, and the Cayman Islands, and establishing operational centers worldwide.
🔑 Business Diversification: Binance has not only expanded spot trading but also ventured into futures, leverage, savings, lending, and various other financial services. Meanwhile, its launched Binance Chain and Binance Smart Chain (BSC) have become important components of the blockchain ecosystem, attracting a large number of developers and users.
Challenges: Contradictions and Compromises in Regulation
📌 Representative Events:
Japan: In 2018, Binance was warned by the Financial Services Agency of Japan for operating without a license. Subsequently, Binance ceased part of its operations in Japan.
UK: In 2021, the UK Financial Conduct Authority (FCA) prohibited Binance from conducting regulated activities in the UK.
EU and Canada: Regulatory agencies in multiple countries questioned Binance's operating model, forcing Binance to adjust its service scope or withdraw from certain markets.
Storm: US Prosecution and Settlement
⚠️ US Regulatory Challenges: Binance's regulatory issues in the US are particularly complex. In 2023, the US Commodity Futures Trading Commission (CFTC) accused Binance of violating US commodity trading regulations. In the same year, the US Department of Justice launched further investigations into Binance's alleged non-compliance with anti-money laundering regulations.
⚠️ Solution: Ultimately, by the end of 2024, Binance reached a settlement with the US government, paying over $4 billion in fines. Zhao Changpeng announced his resignation as CEO and served four months in prison for fulfilling related responsibilities. This incident marked a significant turning point for Binance in its compliance journey.
Current Situation: The Secret of Leading Trading Volume and Security
✅ Leading Global Trading Volume: By the end of 2024, Binance's average daily trading volume exceeded $76 billion, accounting for more than 60% of the global market share, making it a true industry leader.
✅ Transparency of Reserves: Binance launched the 'Proof of Reserves' mechanism, allowing users to verify the platform's asset reserves. As of now, the reserves in Binance's cold wallet have exceeded $60 billion, covering all users' deposit needs and enhancing public confidence in the platform's security.
✅ Technical Strength: Binance's trading system can handle high concurrency, and the platform's stability is highly praised by users.
✅ Security Assurance: Binance implements a multi-layered security mechanism, such as cold wallet storage, multi-factor authentication (MFA), and real-time monitoring. After the hacking incident in 2019, Binance quickly compensated users for their losses and established the 'SAFU Fund' (User Safety Asset Fund), further enhancing user trust.
✅ User Experience: From a clean interface design to diverse functions, Binance is committed to optimizing user experience.
Outlook: A New Starting Point Under Regulatory Compliance
🌏 Transformation and Upgrade: Today's Binance is no longer just an exchange, but a comprehensive ecological platform covering blockchain technology development, financial services, and educational promotion. In an increasingly stringent global regulatory environment, Binance has gradually embraced compliance and transformed into a more transparent and robust institution.
🌟 Investor Trust: For investors, Binance is not only a platform for trading cryptocurrencies but also an important participant witnessing the growth of the crypto industry. Regardless of how it develops in the future, Binance's story will continue to write new chapters.
Our channel focuses on introducing various fun and fresh topics in Web3, helping everyone understand and enter a brand new world, and allowing everyone to avoid pitfalls in this industry. If you like us, please follow our channel and ask the assistant to join the group, so we can learn about this new world together.
