Crypto Banking And Binance — What Really Happens To Your Funds And Data

By David Corne on ALTCOIN MAGAZINE

David Corne
Nov 3 · 5 min read

Chinese tech firms are currently in the crossfire of the ongoing US-China trade war as the White House steadily slaps on more tariffs on Chinese goods and steel while the Chinese Communist Party presses on with slogans such as “Bully us, wishful thinking!” while raising US tariffs an additional 25 %. Meanwhile, Chinese tech giants have been facing waves of allegations and barriers to entry. Telecom giant Huawei has been accused of allegedly spying on its users and crypto exchange platform Binance is struggling to maintain a viable position in US markets.

Is Your User Data And Money Safe With Binance?

Originally based in Shanghai, the exchange platform now claims to be a wholly Japanese firm. While Binance moved its servers and headquarters to Japan, its motives remain the same. While no proceedings have been opened against Binance for data harvesting or mismanagement on behalf of the Chinese government, its dicey track record proves otherwise.

In May of this year, Binance was hacked with over $40 Million worth of Bitcoin disappearing from investor balances overnight. One of the largest exchange platforms by volume, Binance was compromised through common phishing techniques, prompting traders to give away their API keys so that hackers had access to 2FA codes other sensitive user data.

This exchange is known for its specific KYC procedures in which users identify themselves through photos holding their passports. Hackers are now holding over 60,000 these images hostage and are demanding a ransom worth a total of 7 BTC.

Commissions And Extortion

Although many praise Binance for the variety of coins it offers, this advantage is reportedly due to an overwhelming commission gained from partnerships with altcoins. The platform reportedly charges up to 400 BTC in listing fees. The exchange platform attempted to conceal their listing price instead of being completely transparent, a move which many in the crypto community fail to understand.

Anti-Binancism has been steadily growing. Communities and customers are known to complain about the failing 2fa security measures that are often faulty, time-consuming, and ultimately unreliable. One trader noted that his balance completely flatlined. “I found my wallet was still 0 when I updated the firmware. It is clear, one transition happened at 7:54 pm on 9/09/2018, while I was abroad,” said the trader. Another user had all his altcoins sold at the market rate.

While the exchange pushes forward in the US, crypto connoisseurs are weary. An increasing number of frustrated users on Reddit are directing their complaints at Binance, as reports of accounts being frozen and mysterious transactions increase.

The bottom line? While trading on the platform may be convenient, one thing is for certain- Binance holds the keys to all accounts in a highly centralized business deal where the bank can shut you out simply because of server downtime.

Refusal To Comply With The Regulation

The New York State Office of the Attorney General (OAG) launched a Virtual Markets Integrity Initiative in 2018. According to their report, the initiative is based on a simple principle that “consumers and investors deserve to understand how their financial service providers operate, protect customer funds, and ensure the integrity of transactions.”

Today, while Binance officially launched in the US in September 2019, New York is not an authorized trading state since they refused to join the initiative. The report also confirmed that the exchange is, in fact, violating New York’s virtual currency regulations. Out of the 13 exchanges listed in the report, only 3 exchanges refused to respond to the NY AG’s investigations.

The violations have only piled up since this report. Investigations have since opened a myriad of concerns in trading including “abusive and manipulative trading” though the use of bots and invasive algorithms, as well as the proven failure to safeguard user funds.

Chinese Firms And US Customers

Chinese firms have struggled to keep up appearances as reliable tech partners while Americans are hesitant to put their faith and data into what they perceive as a volatile and compromising environment. The Huawei proceedings are one of many espionage-themed incidents involving Chinese tech firms.

The issue of data mismanagement is a fear known to many Americans. On a political angle, over 68% of Americans say they cannot trust the Chinese government. The White House narrative has only exacerbated this sentiment, as we pass nearly 6 months in the trenches of the trade war.

Huawei has been facing over 23 major indictments and allegations for committing bank and wire frauds, in addition to doing business with US-sanctioned Iran. The founder of the telecom giant, Ren Zhengfei, was an engineer for the Chinese People’s Liberation Army in the 1980s, and many worry that Huawei is a long arm of the Chinese government.

This distrust is not unfounded. A history of Chinese hacking has plagued American consumers in the past. The famous “Cloud Hopper” hack reached its peak as Chinese hackers broke into the networks of major technology service providers. IBM, Ericsson, and Hewlett Packard were part of the many victims as user data and industrial secrets were severely compromised.

Foreign tech companies certainly have a lot to offer as new competitors enter US markets, yet Chinese tech appears to be a gamble. Binance, Huawei, and other tech players are impactful contenders with questionable business track records. While decentralization and market freedom are important for crypto traders, it is clear that Binance stands on rocky ground as complaints, frozen accounts, and data violations keep adding up.


ALTCOIN MAGAZINE

The best damn place to read and write about crypto and blockchain.

David Corne

Written by

ALTCOIN MAGAZINE

The best damn place to read and write about crypto and blockchain.

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