Binance is one of the most popular cryptocurrency exchanges in the world. Founded in 2017, Binance has grown to become one of the largest exchanges in terms of trading volume.
Binance is also known for its innovative features, such as its margin trading platform and its mobile app.
However, as with any other exchange, there are always risks associated with using Binance. In particular, there have been concerns raised about the security of the Binance platform.
In this article, we will take a look at some of the risks associated with using Binance and whether or not it is a trusted app.
One of the main risks associated with using Binance is the possibility of hacks. There have been a number of high-profile hacks on cryptocurrency exchanges in recent years, and Binance is not immune to this risk.
In May 2019, Binance was hacked and 7,000 BTC (worth over $40 million at the time) was stolen from the exchange. Although Binance has since reimbursed all affected users, this hack highlighted the fact that even the largest exchanges are vulnerable to security breaches.
Another risk to consider is that of liquidity risk. This is the risk that an investor will not be able to sell their assets due to lack of buyers.
This can happen when there is low trading volume on an exchange, or if the price of a particular asset suddenly plummets. Liquidity risk is something that all investors need to be aware of, but it is especially important for those who trade on margin or who trade volatile assets such as cryptocurrencies.
Finally, it is also worth noting that Binance is a centralised exchange. This means that it is not decentralised like many other exchanges (such as IDEX or EtherDelta).
Centralised exchanges are generally considered to be less secure than decentralised ones, as they are more susceptible to hacks and single points of failure. However, Binance has taken steps to improve the security of its platform, such as implementing 2-factor authentication and storing user funds in cold storage wallets.
Overall, while there are some risks associated with using Binance, it remains one of the most popular and trusted cryptocurrency exchanges in operation today.