On Monday, Binance, the world’s largest crypto trading platform, announced that it has encountered some difficulties affecting its futures customers. The company assured that their team is working on a solution and will update customers on progress. The significance of these events for Binance lies in the possible impact on customer loyalty and trust in the platform.
Changpeng Zhao (CZ), the CEO of Binance, explained that the platform faced several challenges related to the Futurrs UM Rest Service/API, affecting both the user interface (UI) and the API. However, he clarified that the COIN-Margined (CM) futures contracts were not affected by these disruptions, only the USD-Margined (UM) contracts. CZ announced that the affected systems are now working normally again and stated that server problems were responsible for the disruptions. However, these affected servers have now been migrated.
Systems should all be back to normal now. Some server issues before. Our team migrated off the affected servers. Thank you for your support!
https://t.co/mJFksnJ0yr
— CZ
Binance (@cz_binance) April 10, 2023
Recently, Binance has reported multiple incidents affecting trading on the platform. Earlier, it had temporarily suspended all spot trading on the platform after realizing that a matching engine had encountered an error with the trailing stop order.
The crypto exchange also recently faced a lawsuit from the U.S. Commodity Futures Trading Commission (CFTC), raising concern among Australian authorities. However, CZ clarified that Binance Australia’s derivatives license was terminated by a recent regulatory order. He stressed that spot trading is still going on in Australia. These events underscore the importance of security and reliability for Binance to ensure the trust of its users and the stability of the cryptocurrency market.
Finding a partner for US banking is proving to be difficult following recent negative headlines
Binance.US, the American arm of the international cryptocurrency exchange, is also currently struggling to establish a new banking partnership that will act as an entry and exit point for its customers’ funds in the United States. After previous banking partners Silvergate and Signature Bank ceased their services, Binance.US is forced to resort to intermediary banks to hold client funds on their behalf. The significance of these events for Binance lies in the challenges they face in maintaining a stable and efficient infrastructure for their US customers. According to a Wall Street Journal report April 8, Binance.US desperately needs a bank to directly manage its customers’ US dollar balances. However, previous attempts to establish direct banking relationships with institutions such as Cross River Bank and Customers Bancorp have failed. The regulators’ crackdown on banks that have crypto companies as customers further complicates the situation.
In March, the US Commodity Futures Trading Commission (CFTC) sued Binance Holdings and CEO Changpeng “CZ” Zhao for alleged trading rule violations. Since 2021, the crypto exchange has been the focus of an investigation by the CFTC. Binance.US customers are affected by the lack of a direct bank connection. In a recent status update, the exchange announced that it would be “moving to new banking and payment service providers in the coming weeks” and warned that some US dollar deposit services could be temporarily impacted during the transition. Currently, FinTech firm Prime Trust manages Binance.US customers’ funds, with a Prime Trust spokesperson confirming that all customer funds are held through their banking partners.
A Binance.US representative explained that the company is working with various US banks and payment providers and is continuously onboarding new partners while improving its internal systems to build a more stable fiat platform and provide additional services. Binance.US isn’t the only crypto company struggling with the banking sector. In the UK, banks are pulling away from customers in the crypto industry, and the few remaining banks that still work with crypto companies are demanding more documentation and information about monitoring customer transactions.
The difficulties encountered by Binance.US and other crypto companies in establishing banking relationships with traditional financial institutions highlight the need for clearer regulation and guidance in the crypto industry. As the industry continues to grow and mature, it is vital that regulators and financial institutions work together to create a transparent and accountable framework for the crypto market. This would allow building a more stable and secure financial ecosystem for all involved.
To address this challenge, regulators as well as banks and crypto companies should work together on solutions that address the concerns of traditional finance without stifling the enormous potential of cryptocurrencies and the underlying blockchain technology. Such cooperation could consist, for example, in the introduction of industry-specific standards for compliance, risk management and transparency.
In addition, the crypto industry itself could work more actively to gain the trust of traditional finance by making its business practices more transparent, strengthening its security measures and promoting clear and effective regulation. This would make it easier for banks and other financial service providers to better assess and manage the risks involved in working with crypto companies.
Ultimately, innovative technologies and solutions such as decentralized finance (DeFi) and stablecoins could help reduce the reliance on traditional banking services in the crypto industry. These alternatives potentially offer new ways to make cryptocurrency trading and management more efficient and independent of existing financial infrastructures.
OKX: The innovative and secure alternative to the Binance crypto exchange
In the rapidly evolving world of cryptocurrencies, it is crucial for investors to find a trusted and secure trading platform. OKX, one of the leading crypto exchanges, has established itself as a solid and safe alternative to the popular exchange Binance in recent years. With a wide range of trading instruments, advanced security measures and innovative features, OKX offers traders and investors a powerful platform for trading cryptocurrencies.
One of the main features of OKX is the variety of trading instruments on offer. The platform offers trading in hundreds of cryptocurrency pairs, including leading coins like Bitcoin, Ethereum, and Litecoin, as well as emerging altcoins. In addition, OKX also offers futures and options contract trading as well as margin trading, giving users advanced trading capabilities and risk management strategies.
Safety comes first at OKX. The platform implements industry-leading security measures to protect customers’ assets and personal information. These include, but are not limited to, cold and warm wallet solutions to protect customers’ digital assets from unauthorized access and cyberattacks. OKX also uses multi-factor authentication methods, including two-factor authentication (2FA), to secure customers’ accounts.
Also the user-friendly interface of OKX is another advantage of the platform. The trading platform is designed for both novice and experienced traders and offers an intuitive and easy-to-understand user interface. The OKX app, available for iOS and Android, allows users to trade and manage their portfolios on the go.
The last decisive advantage of OKX is the innovative power of the platform. OKX continuously invests in the development of new features and technologies to provide users with the best possible trading experience. Examples of such innovations include the launch of staking and DeFi products that offer customers an additional revenue stream by staking their cryptocurrencies or investing in DeFi projects.
