Binance Crypto Exchange: Your Questions Answered

Following the SEC charges against the world’s largest crypto exchange, people are wondering what’s the difference between Binance and Binance.us, who is Changpeng Zhao and more.

Updated Sep 29, 2023 at 12:03 p.m. UTC

Founded in 2017 by Changpeng Zhao, who is often referred to as just “CZ,” Binance is the world's leading cryptocurrency exchange by trading volume as of June 2023. The company was originally based in China but had to leave Shanghai due to regulatory restrictions shortly after its launch.

Binance developed its own blockchain, Binance Smart Chain (later renamed to BNB Chain), which facilitates trades on the exchange. The native token of the blockchain is Binance coin (BNB) and the company has also launched a stablecoin, BinanceUSD (BUSD). Because of U.S. regulatory rules, Binance created a supposedly separate company for its U.S. clients in 2019, Binance.US.

On June 5, 2023, the U.S. Securities and Exchange Commission (SEC) filed charges against Binance.US as well as CZ, who serves as Binance CEO, on allegations of violating federal securities laws by offering BNB and BUSD to the general public, calling them unregistered securities. The SEC lawsuit also casts fresh doubt on the independence of the company’s U.S. arm and its staking service.

This is not Binance’s first battle with U.S. regulators. Binance is also under ongoing scrutiny from the U.S. Commodity Futures Trading Commission (CFTC) who sued CZ and Binance in March 2023, alleging the company knowingly offered unregistered crypto derivatives products in the U.S.

Here is everything you need to know about Binance, Binance.US and CEO Changpeng "CZ" Zhao.

Who is Changpeng "CZ" Zhao and why did he launch Binance?

CZ is a well-known personality in crypto, actively engaging with the crypto community through Twitter and speaking at conferences and to the media. As for his origins, he was born in China and emigrated to Canada when he was 12 and says he is a Canadian citizen. In high school, he worked part-time at McDonald’s, which is part of his well-known lore. He graduated from McGill University with a degree in Computer Science.

After college, he worked for the Tokyo stock exchange and Bloomberg Tradebook developing software for the businesses. He then founded a startup in 2005, Fusion Systems, which focused on creating an automated high-frequency trading platform. Following that, he worked for several crypto startups including a stint as co-founder and CTO of OKCoin. Another piece of the CZ lore is that he first heard about Bitcoin at a poker game, which planted the seed that led him to create his own cryptocurrency exchange, Binance.

According to the white paper, Zhao's goal for Binance was to compete with other exchanges by offering solutions to the numerous problems he saw with the cryptocurrency trading infrastructure – including poor technical architecture, insecure platforms, low market liquidity, poor customer support and poor language support.

Shortly after Binance’s 2017 launch, Binance raised $15 million through an Initial Coin Offering (ICO) for BNB, the terms of which were also laid out in the white paper.

What’s the difference between Binance and Binance.US?

Binance started as one big company, founded in Shanghai in 2017. Because of China’s crackdown on crypto, the company left shortly after and while there were efforts to relocate the headquarters to Singapore and Malta was once thought to be Binance’s base, CZ currently claims that Binance has no headquarters and that wherever he is, that is where Binance is based.

Binance also has a native coin, Binance Coin (BNB), which was initially launched on Ethereum as an ERC-20 token and subsequently migrated to Binance's proprietary blockchain, BNB Chain. BNB functions as an exchange token, meaning holders of BNB with Binance accounts can access discounted fees on the exchange.

Binance created Binance.US in 2019 in response to regulatory requirements in the United States and notified customers that their accounts would be required to migrate to the new U.S-based exchange in November 2020. That said, many people noted that by using a VPN service, U.S.-based customers could still use Binance’s services.

One of the biggest differences between the two exchanges is that Binance.com offers a much wider range of cryptocurrencies, with over 500 available for trading. Binance.US offers over 120 cryptocurrencies and is not available in all states as of writing, with Hawaii, New York, Texas, and Vermont blocking use of the exchange.

The other big difference is that Binance.US does not offer margin trading or futures contracts, while Binance does. Both platforms offer low fees.

Finally, unlike Binance’s stance that it has no headquarters, the U.S. arm is clearly based in Palo Alto, California. The SEC suit is specifically against Binance.US and Zhao and not the larger exchange.

Binance: A timeline of major events and notable news

July 2017: Binance launches and raises $15 million through its BNB ICO.

July 2018: Binance acquires Trust Wallet, a free, non-custodial mobile wallet to support its upcoming decentralized exchange (DEX) offering.

January 2019: Binance starts to offer support for new token listings through ICOs (initial coin offerings) and IEOs (initial exchange offerings), through its Launchpad product.

April 2019: Binance migrates BNB from Ethereum to its proprietary chain, then called Binance Smart Chain (now rebranded to Binance chain or BNB chain)

April 2019: Binance launches its DEX ahead of schedule.

May 2019: Binance gets hacked for the first time. Hackers steal over 7,000 bitcoin (BTC) from Binance (the equivalent of roughly $41 million at the time). Zhao quickly took to social media to reassure users that no one lost funds and that Binance used its reserve funds to cover the costs of the stolen crypto. CZ's "Funds are #SAFU" tweet has become a meme in the crypto space.

June 2019: Binance announces it will launch a new trading platform for U.S. customers, in partnership with a firm called BAM Trading Services.

July 2019: Binance hires former Ripple executive, Catherine Coley, to run its planned U.S. marketplace.

September 2019: Binance launches its own dollar-backed stablecoin, BUSD in partnership with the Paxos Trust Company.

September 2019: Binance.US launches in 37 states. The new marketplace supports six cryptocurrencies at launch: bitcoin, (BTC), ether (ETH), XRP, bitcoin cash (BCH), litecoin (LTC), tether (USDT) and BNB. BUSD is notably not supported at launch.

April 2020: Binance buys CoinMarketCap, a cryptocurrency data provider, for a rumored $400 million, making it one of the biggest M&A deals in crypto. “CoinMarketCap has more users than any other product in the crypto space,” Zhao said at the time. “It’s a very valuable platform.”

September 2020: Binance rolls out Launchpool, a crypto staking platform.

November 2020: Binance notifies U.S. customers they have a hard deadline of two weeks to migrate to the new platform before Binance shutters their accounts.

April 2021: Binance.US hires Brian Brooks as CEO to replace Catherine Coley in the role.

August 2021: Binance.US CEO Brian Brooks quits over “strategic differences” after just months in the job.

September 2021: Binance.US promotes Brian Schroder to CEO; he formerly served as president and board member for the firm.

April 2022: Binance.US raises $200 million in its first funding round, giving it a $4.5 billion valuation.

September 2022: Binance announces it will stop supporting the second-largest stablecoin USDC and automatically convert customer funds to BUSD.

October 2022: Binance suffers another major hack, and had to briefly halt trading on BNB after a “potential exploit” drained $100 million in crypto.

October 2022: Binance confirms it has contributed $500 million towards Elon Musk’s bid to buy Twitter.

November 2022: Amidst the collapse of FTX, there was a brief moment when Binance was going to buy the rival exchange. That deal quickly collapsed as the scope of FTX’s issues came to light.

December 2022: Binance.US reaches an agreement to buy Voyager Digital's assets for just over $1 billion. Voyager, had gone into bankruptcy earlier in 2022 and originally had agreed to sell its assets to FTX, which folded itself.

February 2023: BUSD issuer Paxos is hit with a one-two punch of an investigation by the New York Department of Financial Services and a Wells Notice from the SEC, which some believed hinted at Binance as a future target for the SEC. Following these actions, Paxos halted minting BUSD.

March 2023: The CFTC sues CZ and Binance over allegations that the company offered unregistered crypto derivatives products.

April 2023: Rumors of an Interpol “Red Notice” for CZ tank BNB price, but there is little to back up the claim.

April 2023: Binance.US pulls out of a $1 billion deal to buy Voyager Digital’s assets, attributing the termination to the "hostile and uncertain regulatory climate in the United States."

June 2023: The SEC files charges against Binance.US and its founder Changpeng "CZ" Zhao on allegations of violating federal securities laws with BNB token and Binance-linked BUSD stablecoin. The suit also alleges that Binance's staking service violated securities law as well as that the entities of Binance.US and Binance were not truly independent.

Edited by Rosie Perper.

This article was originally published on Jun 6, 2023 at 6:13 p.m. UTC

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in Bullish Group as part of their compensation.

Toby Bochan

Toby Leah Bochan was the Managing Editor of Web3 and Learn at CoinDesk. Toby holds BTC.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.