Having started as a small startup, Binance has transformed into one of the largest cryptocurrency exchanges globally. Launched in the late 2010s, Binance has made a significant impact on the crypto industry through its innovative ideas and involvement in controversies. Despite its relatively recent establishment, Binance has achieved significant success within a short span of time. From introducing a groundbreaking stablecoin to developing its smart chain, Binance has truly revolutionized the field. In recent months, Binance has been making headlines worldwide, not only for its innovative crypto concepts but also due to its involvement in various controversies. The story of Binance is nothing short of a captivating documentary, so let’s embark on a brief deep dive into the history of Binance.
Binance’s Launch (July 2017):
In July 2017, Binance commenced its operations with its original headquarters in China. It was founded by Changpeng Zhao and He Yi, with Changpeng Zhao currently serving as the CEO of Binance. Prior to 2017, Changpeng Zhao had gained extensive knowledge about cryptocurrencies and their statistics while working at OkCoin. His expertise propelled him to become one of the most influential figures in the crypto world after establishing Binance. In September 2017, Binance relocated its headquarters to Malta, Japan, as the Chinese government held a negative stance toward crypto trading. Presently, the exchange has settled in the Cayman Islands, with a secondary headquarters in the United States known as Binance US.
The Prime Era of Binance (2018-19):
Raising Funds for a Stablecoin Project (August 2018):
The year 2018 witnessed the booming growth of e-commerce platforms, leading many crypto exchanges to explore this opportunity. It was during this time that Binance introduced its idea to allocate $32 million for the development of a stablecoin called Terra. The project received backing from TMO, one of South Korea’s largest e-commerce platforms, with the aim of promoting the use of cryptocurrencies among customers.
Partnership with Simplex (January 2019): Deep Dive into the History of Binance
Simplex, an Israel-based payment processing company with a global user base, became a valuable partner for Binance at the beginning of 2019. Through this partnership, Binance enabled users to purchase cryptocurrencies directly using their credit cards on the official Binance website.
Revolutionary Innovations by Binance: Deep Dive into the History of Binance
Announcing Binance Jersey (2019):
Just two years after its launch, Binance was on its way to becoming the world’s largest cryptocurrency exchange. Although its influence was primarily concentrated in North America and Asia, Binance sought to extend its reach to Europe. To achieve this, Binance introduced Binance Jersey as a sister company, facilitating cryptocurrency trading for Europeans using British pounds and euros.
Launch of Binance Smart Chain (September 2020):
The introduction of Binance Smart Chain (BSC) marked the beginning of Binance’s global dominance. While Binance had previously launched the Binance Chain in mid-2019, that chain primarily focused on validation and governance. Binance subsequently launched BSC as a means to strengthen its position in the flourishing realm of Decentralized Finance (DeFi). This ground-breaking step was marketed as an “alternative to Ethereum” due to BSC’s superior speed and reliability.
Significant Controversies Surrounding Binance:
Experiencing Large-Scale Hacking (May 2019):
The early months of 2019 brought great success to Binance, with the renowned platform reaching its peak in terms of trading volume. However, in May 2019, an unfortunate event occurred. Hackers infiltrated the world’s leading crypto exchange, resulting in the theft of BNB tokens worth $570 million. This incident marked the first and most substantial hacking incident in Binance’s history. Nonetheless, within a span of 2-3 months, Binance managed to compensate its users using secret funds, demonstrating their commitment to resolving the issue.
IRS Investigation Alleging Money Laundering (May 2021):
As Binance reached new heights in terms of trading volume, the IRS initiated an investigation into the world’s largest cryptocurrency exchange. This unexpected development sparked global attention, with allegations of money laundering and unregistered transactions being leveled against Binance. This controversy became one of the critical phases for the deep dive into the history of Binance. To this day, the United States Department of Finance and the IRS continue their investigation into these allegations.
Backlash Against Binance for Not Banning Russian Users Amid Russia-Ukraine War (March 2022):
The Russia-Ukraine war presented a significant challenge for humanity, prompting many countries to impose sanctions on Russia. Various companies and organizations issued statements banning Russia in response to these events. However, Binance chose not to freeze the accounts of Russian users, leading to a substantial backlash. This decision resulted in widespread criticism of Binance’s stance during the conflict.
Feud With FTX (2022-23):
The crypto world witnessed a monumental collapse with FTX, once a leading cryptocurrency exchange. Binance and FTX were fierce competitors, yet Binance had also been a major investor in FTT, FTX’s native token. In recent months, FTX experienced numerous disruptions, including hacking incidents and illegal accounts. During this tumultuous period, Binance made the strategic move to sell its holdings in FTX, triggering a liquidity crisis that ultimately led to FTX’s collapse in May 2023. Some crypto analysts speculate that Binance strategically timed this action, indicating a deliberate move against FTX.
The Future of Binance:
With the downfall of FTX, Binance has successfully surpassed its biggest competitor. Despite being embroiled in various controversies, many analysts predict that Binance will reach new all-time highs in the coming years. The most recent forecasts indicate a 1.98% increase in the value of BNB in July. Consequently, Binance seems poised for long-term success as deep dive into the history of Binance suggests. However, it remains intriguing to observe how the largest cryptocurrency exchange will navigate the challenges posed by these controversies. Only time will tell if these controversies will significantly impact Binance’s trajectory. Let us wait and watch.