Within the span of 4 years, Binance has grown to become the world’s leading blockchain ecosystem and is currently operating one of the largest digital asset exchanges. In 2020 alone, Binance Exchange recorded $3.88 billion in average daily trading volume, an increase of 36% from the previous year. With a company culture that encourages innovation and emphasizes a user-first philosophy, it is no wonder how Binance is able to achieve tremendous growth and exceed all expectations of a cryptocurrency company. By taking some industry-first steps and efforts, Binance has greatly shaped and spearheaded the crypto industry’s growth over the past few years.
Founded in early July 2017 by current Binance CEO Changpeng Zhao (CZ), Binance became the first crypto exchange to hold an ICO, where our company issued the native BNB token. Given the excitement around ICOs at that time, holding an ICO was an extremely astute and timeous business decision which saw Binance raising a funding of $15 million. Now, the value of BNB has grown exponentially and the utility token itself has a range of use cases. The Binance Smart Chain community uses BNB to settle transaction fees on the network, while other use cases beyond the Binance ecosystem include merchant payments, travel booking platforms, in-game rewards, virtual gifts, staking through PoS and many more.
There are other initiatives that Binance have implemented to take the crypto industry into the next level, as detailed in the subsequent paragraphs.
Here at Binance, we pride ourselves for having an interconnected blockchain ecosystem that includes key infrastructure pillars such as a Trust Wallet, CoinMarketCap, the NFT marketplace and many more. We are also extremely engaged in the future of blockchain technologies and are therefore investing in many promising projects and organizations, including the community-driven Binance Smart Chain which now boasts the world’s largest transaction volume in the DeFi space. At the end of 2020, there were 60 projects using the Binance Smart Chain and 3,000 BNB staked by Binance Smart Chain validators. Now, there are 800+ projects with 3.25M unique addresses at Binance Smart Chain. The all-time high daily transaction total is over 13M which is almost 700% more than Ethereum. Thanks to the dedicated investment by Binance, the ecosystem is growing and developing day by day.
Users’ interests are always prioritized and placed at the highest standard in Binance. That is why Binance announced the Secure Asset Fund for Users (SAFU) in July 2018; it is part of our constant efforts to adopt systems which best protect our users. SAFU is an emergency insurance fund. Binance commits to allocating 10% of all its trading fees received into SAFU to offer protection to our users and their funds in extreme circumstances. This fund is stored in a separate cold wallet, and have been used to compensate users in the past, in situations such as scams or hacking. In December 2020, for instance, Binance utilized the SAFU Fund to compensate a total of $10.1 million USD to affected and eligible users after an infinite minting attack.
Another way Binance protects its users is through regular reviews and enhancements to our due diligence policies, especially when it comes to both KYC (Know-Your-Customer) and AML (Anti-Money Laundering) mechanisms. This is especially pertinent at the current juncture, as the crypto industry is facing intense regulatory scrutiny worldwide which mirrors many disruptive industries that come before it. As the world’s leading blockchain company and ecosystem provider, Binance vows to lead by example in all areas, including compliance. That is why we have significantly strengthened our user verification systems over the past few months. Now, users need to reach at least an Intermediate Verification level, which requires submission of a government-issued identification document as a proof, before they can access Binance’s full range of products and services. By making it harder for unverified users to transact in cryptocurrencies on Binance’s platforms, we hope to ease regulators’ concerns regarding money laundering, terrorist financing and other illicit activities being conducted. After all, creating a safe and fair trading environment is best for our users in the long-run, and we are committed to taking the necessary steps to make that possible.
Moreover, the global crypto ecosystem cannot grow in a secure and sustainable manner unless threats such as ransomware and fraud are minimized or eliminated. Correspondingly, Binance emphasizes the importance of being proactive and collaborative in our efforts to eliminate financial crime. Recently, Binance Security took part in an international investigation with Ukraine Cyber Police, Cyber Bureau of Korean National Police Agency, US Law Enforcement, Spanish Civil Guard, and Swiss Federal Office of Police, among others, to capture a prolific cybercriminal ring called FANCYCAT. In all, FANCYCAT is responsible for over $500 million worth of damages in connection with ransomware and millions more from other cybercrimes. Through our in-house AML detection and analytics capabilities, Binance greatly aided in the identification and eventual arrest of FANCYCAT.
Such successful takedowns serve as a reminder of why cybersecurity and AML detection tools are extremely important. At Binance, we are constantly upgrading our softwares and systems to protect our users from ransomware and other threats to online security, as well as to weed out bad actors in a fast, efficient manner. Our ongoing partnerships with law enforcement agencies, as well as security and blockchain analytics firms, would be a driving force in improving cybersecurity measures across the wider crypto industry.