What is Binance? 

Binance was founded in 2017 and today is the world’s largest exchange by volume. Binance is popular due to its easy-to-use interface, wide range of cryptocurrencies (350+), and low fees (0.1% and lower). While Binance has seen significant user growth in recent years, it’s also faced controversy. The platform has been forced to withdraw from markets like Canada and Australia, and even saw its CEO, Changpeng Zhao, resign and face criminal charges in the US. 

Security features of Binance

Binance is considered a secure exchange. Let’s walk through some of the measures that Binance takes to keep your cryptocurrency safe: 

• Encryption: Binance uses end-to-end encryption for all transactions. 
• Cold Wallet Storage: Binance stores the majority of customer funds in offline, cold storage to protect against potential hacks. 
• Two-Factor Authentication (2FA): Binance offers two-factor authentication — giving you an extra layer of protection if a hacker gains access to your password. 
• Real-Time Monitoring: Binance uses AI to detect scams and fraud. Binance sent more than 15,000 alerts to users daily in 2024.
• Access Control: Users can whitelist wallet addresses and limit access to your account API based on IP address. 
• SAFU (Secure Asset Fund for Users): Binance maintains a $1 billion insurance fund to reimburse users in case of a hack. 
• Fraud Prevention: In 2024, Binance blacklisted 47,000 malicious addresses. It’s estimated that these actions prevented $129 million in losses. In addition, Binance recovered $9.1 million via its Anti-Scam Refund Initiative.

What legal and regulatory issues has Binance faced? 

In recent years, Binance has faced regulatory challenges across the globe. 

Global Scrutiny: In recent years, Binance has withdrawn from countries like Canada, Australia, and the Netherlands due to regulatory pressure, leaving users in these regions unable to trade or access funds.

U.S. Regulatory Issues: Binance.com was forced to stop operating in the U.S. In response, Binance launched Binance.US — a platform specifically designed to comply with American regulations. While the platform offers fewer cryptocurrencies and a different fee structure than Binance.com, it’s considered safe and secure. 

Money laundering controversy: Binance has faced issues in the US for violating money laundering-related laws. Binance has paid more than $4 billion in fines related to these violations. In addition, Binance CEO Changpeng Zhao was forced to resign and was sentenced to four months in prison in the United States. 

How Does Binance Secure Your Assets?

1. RSA Key for API Trading

API stands for Application Programming Interface, which lets users connect their Binance account to external trading software for faster or automated trades. RSA is a type of encryption that uses two keys: a public key and a private key. The public key locks the data, and only the private key, which is kept secret, can unlock it. On Binance, when you create an API key for trading, it’s protected with RSA encryption. This means that any commands, whether buying or selling crypto, will be sent through the API and scrambled into a code that only Binance can read with the matching private key. This stops hackers from intercepting or changing your instructions.

2. IP Access Restrictions

An IP address is like a unique online ID for your device, showing its location on the internet. With this feature, you can set a list of trusted IP addresses, say, your home or office Wi-Fi, that are allowed to log into your Binance account or use its API. This works by blocking any login or API request that comes from an unrecognized IP address. For example, if someone tries to access your account from a different country using a stolen password, Binance will stop them because their IP isn’t on your approved list. It’s a simple but strong shield against hackers, especially if they’re far away or using a strange network.

3. Wallet Address Whitelisting

When you turn on whitelisting, you create a list of trusted wallet addresses, like your personal hardware wallet or another exchange account, that are the only places you can withdraw funds to. Here’s how it helps: if a hacker gets into your account and tries to send your crypto to their own wallet, Binance will block the transaction unless that wallet is on your whitelist. Each time you add a new address to the list, Binance asks for confirmation, often through email or two-factor authentication, to make sure it’s really you. This stops thieves from draining your funds, even if they bypass other security.

4. Anti-Phishing Code

The anti-phishing code is a simple but clever tool Binance uses to protect you from fake emails pretending to be from them. With this feature, you set a unique code in your Binance account security settings. After that, every genuine email from Binance will include this code.

5. Two-factor authentication (2FA)

Normally, you just need a password to access an account, but with 2FA, you also need a second “factor”—something only you have. Binance offers options like Google Authenticator (an app that gives you a new code every 30 seconds) or SMS (a code sent to your phone). Binance requires 2FA for big actions like withdrawals or password resets, adding protection where it matters most.

6. Cold Wallet Storage

A cold wallet is a device that stores your crypto and isn’t connected to the internet. Binance keeps the vast majority of funds in these cold wallets, away from online hot wallets that handle daily trades. If Binance’s online systems get attacked, only a small amount of crypto in hot wallets is at risk, while the bulk stays untouchable in cold storage. Moving funds to cold wallets involves strict security steps, like multiple approvals, so it’s not easy for anyone to access them.

What are the risks of using Binance? 

Let’s walk through the risks of Binance:

Platform Breaches: Binance has faced multiple hacks in its history. However, the company’s insurance fund has been used to compensate users for lost assets. 

Phishing scams: Scammers often impersonate support representatives from Binance to hack into customer accounts. However, it’s important to note this type of scam is not just limited to Binance — it’s common across the cryptocurrency ecosystem. 

Regulatory risks: In the past, Binance has stopped operating in multiple countries due to regulatory issues. If Binance pulls out of your region, you’ll need to transfer your funds to avoid losing access to your crypto. 

Navigating Trading on Binance: Key Features and Processes

Like other crypto exchanges, Binance offers services for trading, listing, fundraising, de-listing, and withdrawing cryptocurrencies. Cryptocurrency enthusiasts willing to launch their tokens can use Binance to raise funds through initial coin offerings (ICOs). Binance is used by millions of traders for exchanging and investing in various cryptocurrencies. To start trading, users must complete the necessary know-your-customer (KYC) requirements. Upon successfully creating a trading account, they can add funds to their public wallet address (provided by Binance) to start trading. The Binance exchange supports four main types of trade orders: limit, market, stop-limit, and one-cancels-the-other (OCO) orders. Limit orders are executed only at the limit price set by the trader. Market orders are executed immediately at the best available market price.

Binance.US Security Practices

Here are a few of Binance’s security measures that help to prevent cyberattacks:

• Cold wallets. Ever since the notorious Mt. Gox hack,¹ security experts have warned exchanges to always keep the vast majority of their crypto on devices that are not connected to the internet. Binance doesn’t disappoint here, as it states that the “vast majority” of its crypto is stored in cold wallets, outside of the grasp of cyberattackers.
• Two-factor authentication (2FA). Like most crypto exchanges, Binance allows you to implement 2FA on your account. If you turn this feature on, you’ll be required to enter a code from your phone every time you log in or make a withdrawal. You can use text messaging or an authenticator app to receive the code. Unlike most exchanges, though, Binance also allows you to use a hardware device such as a YubiKey to receive the code, which is an even stronger method than using a mobile app.
• Real-time monitoring. Binance tracks every action done on the exchange, and it has an algorithm that analyzes activity to see if it is unusual. Any action identified as suspicious results in a 24-to-48-hour freeze on withdrawals from your account. If you actually did authorize the action, you can contact customer service to have the freeze removed, or you can just wait for the time period to pass. But if your account was hacked, the 24-to-48-hour freeze should give you enough time to alert the staff that your account has been compromised.
• Access control. If you want further protection, you can set up “access control” mechanisms on Binance that limit withdrawals to only certain IP addresses or wallet addresses.
• Organizational Security. Binance uses advanced organizational security systems to help keep its crypto secure, including threshold signature schemes (TSS)² that require multiple parties to authorize a transfer from one wallet to another.
• Security notifications. If Binance’s system detects suspicious activity on your account, it immediately notifies you through email.
• Data encryption. Social Security numbers, addresses, and other personal data are stored in encrypted form, making it very difficult for a hacker to get this information.
• Secure Asset Fund for Users (SAFU). Binance keeps a $1 billion fund available to reimburse users in case there is a major breach of Binance’s platform. This should help to make sure that the company does not go bankrupt and fail to pay its obligations to users.

How to Stay Safe While Using Binance

Here are a few steps you can take to help protect the crypto you buy through Binance.

Enable two-factor authentication (2FA). If you enable 2FA, you’ll be required to enter a code from your phone every time you log in or make a withdrawal. This will help to prevent your account from being accessed in case your password is exposed or your email account is compromised. For even better security, consider using an authenticator app (instead of text messaging) to receive the code. Or, if you can afford it, purchase a YubiKey or other hardware solution to receive your 2FA code.

Use a strong password. Ideally, the password you use for Binance should be different from the password you use on other accounts. But a unique password won’t cut it. You need a strong password – at least 12 characters long with a combination of uppercase and lowercase letters, numbers, and special characters. If you’re having trouble thinking up a strong password, you can always use our Random Password Generator. (The passwords we generate are completely random and unique, and we don’t log any generated passwords!)

Watch out for malware. One of the easiest ways for a hacker to get your login info is to infect your PC with malware. The attacker sends you an email that looks like it’s from someone you know, and it contains a file attachment that appears to be a .pdf or some other legitimate file that you want. When you open the file, it infects your computer with software that searches through your computer looking for sensitive data. At this point, it can steal your Binance password from within your browser (assuming you’ve saved it there for convenience) or even record your keystrokes the next time you log in.

Avoid getting phished. Another vector of attack is for the thief to set up a fake Binance site. He then sends you an email claiming to be Binance and telling you that you need to log in for some urgent reason. When you click the link in the email, it sends you to the fake site, and when you try to log in, the attacker accesses your username and password. That’s called phishing, and millions of people fall for it.

To help prevent this, check the sending address on every email that claims to come from Binance, especially if it encourages you to click a link. An authentic email will come from the domain @binance.us or @binance.com, but a fake one may come from @ww-binance.com or some other misspelling.

More importantly, check the URL of the website the link leads to. You may notice that the domain there is not binance.us. To be even more secure, you can set up an anti-phishing code through the Binance app interface. Once you do this, the code will be included in any email from Binance, making it easier to identify fake emails.

Consider withdrawing your crypto. Ultimately, the most effective way to protect your crypto is to just take it out of the Binance exchange completely. Withdraw it into your private wallet, and store the seed words in your wallet in a secure location within your house. This does away with usernames and passwords completely, making it much more difficult for an attacker to get your crypto. For more information on how to do this, check out “Storing Crypto Safely Using Wallets” in our complete guide to investing in crypto safely. No crypto exchange is perfectly safe. But following these tips should dramatically increase your chances of keeping your crypto protected.

Exploring Additional Services Offered by Binance

In addition to exchange-specific services, Binance also offers other tools, platforms, and services. Some of them are as follows:

Earning

Binance Earn lets users earn interest on stablecoins. The interest rates vary by coin and investment period.

Lending

The Binance Card, a Visa card, converts cryptocurrency to fiat currency for spending. It has no admin fees, but users might face third-party fees. Binance Crypto Loans allow users to borrow for spot, futures, and margin trading. Terms of seven, 14, 30, 90, and 180 days are available, with interest calculated based on the number of hours you’ve borrowed for.

Smart Pool

Binance Smart Pool lets miners optimize income by switching between cryptocurrencies. Binance Pay allows free global crypto payments, usable in Binance’s Marketplace.

Development

Binance has a blockchain technology incubator called Binance Labs, which focuses on nurturing promising pre-ICO stage projects. It helps deserving cryptocurrency project teams by providing necessary funding for development, advisory resources, and a launchpad for any necessary listing and fundraising exercises. Binance also offers a site called LaunchPad for hosting new and emerging blockchain projects and API interfaces. As of July 2023, over 70 projects have been launched.

Why should you use Binance? 

While Binance has faced issues in multiple countries, it does offer the following benefits:

• Low fees:  Binance offers some of the lowest fees in the industry. Fees are 0.1% and lower on Binance.com! 
• Wide cryptocurrency selection: Binance offers more than 350 cryptocurrencies for trading — significantly more than other exchanges! 
• Advanced features: Binance offers advanced trading options like margin and derivative trading, as well as features like Binance Pay for low-fee cross-border transactions. 
• User interface: Binance is considered easy-to-use, and transactions are executed in a fast, seamless manner. 

Tips to Stay Safe on Binance

• Enable 2FA: Use Google Authenticator or SMS for an extra login and withdrawal security layer.  
• Use a Strong, Unique Password: Make a long password with letters, numbers, and symbols that are not used elsewhere.  
• Set Up Wallet Address Whitelisting: Allow withdrawals only to trusted addresses you approve.  
• Add an Anti-Phishing Code: Create a personal code to verify real Binance emails and avoid scams.  
• Limit IP Access: Restrict account access to specific, trusted IP addresses.  
• Store Funds in Cold Wallets: Move large amounts to offline wallets you control, not Binance’s hot wallet.  
• Check Emails Carefully: Only click links from official Binance emails with your anti-phishing code.  
• Update Software Regularly: Keep your devices and apps updated to avoid security flaws.  
• Monitor Account Activity: Check login and transaction history often for anything unusual.

Conclusion

Binance is an excellent crypto exchange for serious traders. It offers very low commissions, a large variety of coins, and advanced trading tools. Most importantly, Binance is a fairly safe crypto exchange with lots of advanced security features. But no crypto exchange is completely secure. In this article, we’ve explained the major security features of Binance, the risks of using Binance, and some ways that you can help to limit these risks.

FAQ

1. Can Binance be trusted?

Giving your data to Binance is considered safe — the exchange uses encryption to protect your personal information. Binance.US is a platform specifically designed for US regulations. While it offers fewer cryptocurrencies and fewer advanced features than its global counterpart, Binance.US is considered a safe platform.

2. Can someone hack your Binance?

If your password is something like “123456” or “mybitcoin2025”, congratulations! You’ve pretty much handed your account over to hackers. Many users rely on SMS authentication. However, with techniques like “SIM swapping,” criminals can clone your number and intercept the codes sent by Binance

3. Is it risky to invest in Binance?

Binance is one of the safer exchanges compared to others. So if you’re actively trading crypto and need to keep it on an exchange, Binance is a pretty secure choice. However, if you’re holding large amounts of crypto long term, a private hardware wallet may be a better choice than keeping it on an exchange.

4. Can I get my money back if I got scammed by Binance?

Open a support ticket or start a chat with support. Provide all the evidence you collected. Request an internal investigation and ask for the recipient’s account to be frozen if the funds are still there. Binance may: Temporarily lock the scammer’s account (if the funds haven’t been moved).

5. Can I leave my money on Binance?

If you want to hold on to your crypto, you can withdraw it to another exchange or a self-custodial wallet for extra safety, which means you aren’t exposed to any of the risks of keeping it on an exchange. If you don’t want to sell or move it, you can simply keep your cryptocurrency on Binance for the time being.