Binance Exchange: What It Is, How It Works, and Examples of Cryptocurrency Trading


Curious about the Binance exchange? Discover everything you need to know about this leading cryptocurrency platform, from its history and services to pros, cons, and more.

What is the Binance exchange?

The Binance exchange, founded in 2017 by Changpeng Zhao, is a prominent player in the world of cryptocurrencies. specializing in altcoin trading, Binance offers a diverse range of crypto-to-crypto trading options, encompassing over 350 cryptocurrencies and virtual tokens. These include popular choices like bitcoin (BTC), ethereum (ETH), litecoin (LTC), dogecoin (DOGE), and their native coin, BNB.

History of the Binance exchange

The Binance exchange made its debut in July 2017 and rapidly rose to prominence under the leadership of Changpeng Zhao. primarily known for crypto-to-crypto trading, Binance stands out for its low transaction fees, high liquidity, and exclusive discounts for users who utilize their native cryptocurrency, BNB.

The exchange places a strong emphasis on security, boasting a multi-tier and multi-clustered architecture to ensure the utmost safety for users’ funds. However, in 2019, regulatory concerns led to the ban of the global Binance exchange in the United States. To comply with regulations, Binance.US was launched to cater specifically to U.S. users, albeit with limited availability in certain states like Hawaii, New York, Texas, and Vermont.

Trading on Binance

Binance offers a wide array of services, including trading, listing, fundraising, de-listing, and cryptocurrency withdrawals. Traders seeking to launch their own tokens can leverage Binance for fundraising via initial coin offerings (ICOs). To start trading, users must complete the requisite know-your-customer (KYC) procedures and then fund their public wallet address provided by Binance.

The exchange supports four primary types of trade orders: limit, market, stop-limit, and one-cancels-the-other (OCO) orders. Limit orders execute only at the specified price set by the trader, while market orders are executed immediately at the best available market price. Stop-limit orders activate only when the price reaches a predetermined level, and OCO orders consist of two orders, with one canceling the other upon execution.

In 2021, the U.K. subsidiary of, Binance Markets Limited, faced regulatory restrictions from the Financial Conduct Authority (FCA), preventing it from offering certain services in Britain. However, this did not impact services offered by to U.K. users.

Types of orders on Binance

Binance offers seven types of orders for crypto derivatives, particularly futures contracts. These include:

  • Limit order
  • Market order
  • Stop-limit order
  • Stop market order
  • Trailing stop order
  • Post only order
  • Limit TP/SL order (strategy order)

Transaction fees

Binance does not charge fees for cryptocurrency or fund deposits. However, withdrawals are subject to transaction fees, which vary based on the specific cryptocurrency and transaction amount. As of June 2023, Binance no longer accepts U.S. dollar deposits from global users but allows deposits in 27 other fiat currencies, including the euro.

Other Binance services

In addition to its core exchange services, Binance offers a range of tools and platforms to enhance the user experience:


Binance Earn provides a platform for staking or earning interest by depositing stablecoins with the exchange. It offers various options and interest rates based on the coin and investment duration.


Binance Card is a Visa credit card that allows users to convert cryptocurrency into fiat currency for spending on products and services. While administrative fees are not incurred for conversion, third-party fees, such as payment network charges, apply.

Binance Crypto Loans enable users to borrow for spot, future, and margin trading, with terms ranging from seven to 180 days, and interest calculated based on borrowing duration.

Smart Pool

Binance Smart Pool allows miners to optimize and increase their income by switching between different cryptocurrencies for mining. Additionally, Binance Pay enables cryptocurrency holders to make fee-free global purchases and is compatible with Binance’s Marketplace.


Binance Labs, the exchange’s blockchain technology incubator, supports promising pre-ICO stage projects by offering funding, advisory resources, and a launchpad for listings and fundraising. Binance also operates LaunchPad, hosting over 70 new blockchain projects as of July 2023.

Binance Coin (BNB)

Binance Coin (BNB) plays a pivotal role in facilitating crypto trading on the Binance exchange. Launched during an initial coin offering in July 2017, Binance allocated tokens to angel investors, the founding team, and ICO participants. These funds were allocated for branding, marketing, and platform development.

Initially running on the Ethereum blockchain with the ERC-20 standard, Binance Coin transitioned to the BNB Chain in 2019. As of July 2023, BNB holds a market cap of approximately $39 billion, making it the fourth most valuable blockchain-based token.

The bottom line

In summary, Binance is a cryptocurrency exchange that lists over 350 cryptocurrencies globally. Beyond trading, it provides various services that cater to both users and blockchain developers. However, it’s essential to recognize the inherent risks associated with investing in cryptocurrencies and ICOs. Always consult with a qualified professional before making financial decisions. Investopedia does not endorse cryptocurrency investments.

Frequently asked questions

Can I trust Binance?

Millions of users trust Binance as a secure platform for cryptocurrency transactions. However, like all entities in the blockchain and crypto sphere, it is susceptible to hacking incidents, as evidenced by the $570 million BNB theft in 2022.

Can U.S. citizens use Binance?

U.S. citizens can utilize Binance.US and are protected by U.S. laws. Accessing global Binance from the U.S. or other restricted countries via alternative connection methods, such as virtual private networks, is prohibited under Binance’s Terms of Use.

Is Binance better than Coinbase?

The choice between Binance and Coinbase ultimately depends on individual preferences. Coinbase is considered more beginner-friendly, while Binance offers a wider range of features, making it suitable for experienced traders and investors.

Key takeaways

  • Binance is a leading cryptocurrency exchange offering trading in over 350 cryptocurrencies.
  • It provides a secure crypto wallet for users to store their digital assets.
  • Binance offers a variety of services, including interest-earning opportunities, investment advice, and mining programs.
  • BNB is Binance’s native blockchain-based token.
  • While Binance has a global presence, regulatory restrictions limit its availability in certain countries.
Article Sources
  1. SEC Files 13 Charges Against Binance Entities and Founder Changpeng Zhao – U.S. Securities and Exchange Commission
  2. SEC Secures Emergency Relief to Protect Binance.US Customers’ Assets – U.S. Securities and Exchange Commission
  3. Gone with the fire: Market reaction to cryptocurrency exchange shutdown – PubMed
  4. Binance Cryptocurrency Exchange – SuperMoney
  5. Binance Coin (BNB) Uses, Support, and Market Cap – SuperMoney