Is Binance safe? Cryptocurrency trading app explained - and other apps to buy Bitcoin and Dogecoin
In recent weeks, interest in amateur trading has risen, thanks in part to the recent GameStop saga, which saw shares in the ailing video game retailer skyrocket after savvy investors banded together online to stick it to hedge fund managers.
Ultimately, the plan wasn’t quite as successful as it could have been, and while some home traders did manage to make legitimately impressive sums from the stocks, their value has now returned to ‘normal’ after crashing.
But a whole new audience of would-be Wall Streeters are hooked, looking for the next dip that could signal an impending price rise.
With his Tesla company ploughing $1.5 billion into the currency, that value has shot up even further, and who knows just how far it can go?
Here is everything you need to know about it.
What is Binance?
It can be a tricky field to navigate, but if you're confident in buying cryptocurrencies then there are places where this can be done.
One of the most popular is Binance, a global cryptocurrency exchange app, which requires registration before making a deposit and trading.
The app originated in China, and was initially developed by the one-man team of Chinese-Canadian business executive Changpeng Zhao, but later moved away from the country as China imposed increasingly strict regulations on cryptocurrency. It is now based in Malta.
It offers a near unmatched breadth of currencies in which to trade, its main selling point which has seen it become the jewel in the crown of cryptocurrency apps.
Is it safe?
Binance itself says it is “trusted by millions worldwide”, and is “dedicated to increasing the freedom of money for users”, though it's had its fair share of setbacks and controversies in the past.
In May 2019, Binance was the victim of a “large scale security breach” in which hackers had stolen an amount of Bitcoin worth around $40 million at the time; though the company said it would reimburse customers through its secure asset fund, the hack rightly raised suspicions of crypto security.
Zhao said the transaction represented “about 2%” of Binance’s total Bitcoin holdings, and ordered a “thorough security review” will be carried out: “Not the best of days, but we will stay transparent,” he tweeted.
Last October, leaked documents were released that alleged Binance created an elaborate corporate structure designed to intentionally deceive United States regulators and secretly profit from investors.
In terms of what users are saying, a quick look at Binance’s Trustpilot review page reveals the company has received more ‘bad’ reviews than good (its star rating of two marks it out as ‘poor’), with tales of misplaced funds, accusations of scams and aloof customer support.
What do the experts say?
However, crypto experts are much more forgiving.
99 Bitcoins’ in depth review of the service concludes that “the pros far outweigh the cons”, while in their slightly unsure write-up, Blockonomi say, “we like to believe that security is taken seriously,” and that “two-factor authentication is available and is always a nice sight.”
It's possible that Trustpilot’s majority negative reviews come from users who have lost big on the crypto market, something that is wont to happen given the notorious volatility of digital currencies.
Whoever you choose to believe on the subject, it’s worth treading cautiously when making your first forays into crypto.
The Financial Conduct Authority (FCA) warns people about the risk of investing in cryptocurrencies, referencing price volatility, product complexity, charges and fees, marketing materials and consumer protection.
What other apps are out there?
Other options to UK users are Coinbase, BC Bitcoin, Bittylicious, Cryptomate, Changelly, ShapeShift, and Bittrex.