Binance Ban in the US: The Story and the Solution
Binance, the Japan-based cryptocurrency exchange giant ranked as number 1 since 2018 in terms of exchange volume, had decided to add another 2020 surprise to the US residents who compose the second-largest Binance traffic audience, second only to Russia. The users who were promised a year ago finally got the notice.
So what’s the story? And why is this a big deal despite other platforms such as Bitfinex banning US users earlier? And most importantly, what’s the solution?
Binance’s ban on US citizens isn’t something that wasn’t foreshadowed earlier. Back in July 2019, while citing regulatory uncertainty in the stats, mainly regarding the trade of some types of coins that aren’t allowed in the US, in relation to security and possible money laundering activity. To put the difference in cryptocurrency variety into perspective, Binance has more than 500 cryptocurrencies available for exchange, while the newly made Binance US has around 52 cryptocurrencies.
Binance’s initial way of regulation was to place a check box for users to state whether they are using Binance from the US or not, which is equivalent to doing nothing, to actually stop US-based users from accessing Binance, as users from the US kept accessing Binance while disregarding the checkbox. And needless to say, that didn't sit well with the US.
Binance sent a notice to US citizens that within 90 days, it will suspend all their activities unless they can prove they reside outside the US, prompting them to withdraw their assets while promising a replacement in the form of Binance US.
While there are alternatives to Binance, such as Coin-base that are based in the US, when compared to Binance, they fall short. To start with, Binance provides users with the option to buy more than 500 types of cryptocurrencies of different types, while typical US-based cryptocurrency exchange platforms provide around 50 coins which are 10% of the choices. Binance provides options that are professional friendly giving users with more experience advantageous options such as:
- Limit order
- Market order
- Stop-limit order
- Trailing stop order
- Post only order
- Peer-to-peer trading
- Margin trading
- One-cancels-the-other order
- and more
These features give the more experienced users an edge when using Binance versus other platforms making sure their profits scale better, especially when coupled with the lower transaction fees.
In addition, the fees on trading are much lower than other platforms with a 0.02% to 0.10% purchase and trading fees compared to a 0.50% + a flat value for Coinbase and 0.75% for E-Toro.
Binance provides a 3% to 4.5% for debit card purchases vs. 3.99% with Coinbase. Binance provides a Free Single Euro Payments Area (SEPA) transfer or $15 per U.S. wire transfer for Binance relative to the 10 per deposit and 25 per withdrawal for coin-base.
All in all, Binance is more efficient as a platform with more users worldwide and a wider coin variety for users to invest in with lower cost and more functionalities.
If you used to be an investor on Binance, you probably think the solution is to switch to another platform as Binance now bans users based on IP, and Binance US is available in 43 states only (Connecticut, Hawaii, New York, Texas, Vermont, Idaho, and Louisiana are the excluded stats). This means if you try to use Binance US from inside one of these states, it won't allow you, as Binance started restricting users more and more.
So the question is, what other options are there? That would be to use a VPN!
Binance US has proof of address policy, meaning even if you’re inside the US and wish to connect to Binance US, you must provide proof of your ID and address. So it’s hard to access the banned stats.
These include providing a government-issued ID (Passport, drivers license, or a federal/state-issued ID card (front and back)) and a proof of address including a name and address displaying (bank statement, brokerage statement, credit card statement, utility bill, mortgage statement, or a property tax statement).
However, for the international Binance, it’s still accessible using a VPN service, which can be used to encrypt your data, meaning your ISP won’t be able to pry, and by connecting to a server in a different location, you gain a different IP address abroad, in which case you can connect to Binance and avoid the extra cost while gaining back access to the extended cryptocurrency list.
Our option on which VPN services might be the best for you to access Binance include
ExpressVPN has a high encryption level (AES 256-bit military-grade encryption) and has a kill switch. The split tunneling makes it extremely efficient as you can encrypt the outgoing Binance data without the side effect of slowing your web surfing experience while monitoring the prices.
ExpressVPN is one of the fastest, if not the fastest VPN out there. Making it very suitable for torrenting and streaming. On the downside, its price is on the higher end of the VPN price spectrum.
Provides users with the split tunneling feature, which might serve well depending on the situation. NordVPN provides a high-end encryption level (AES 256-bit military-grade encryption).
Pricewise NordVPN is relatively lower than ExpressVPN, giving it an edge in this section.
Surfshark is based in the British Virgin Islands (not a 5/9/14-Eyes Alliance member) with a no-logs policy. Has over 3200 servers spread over 65+ countries. It provides 256-bit encryption. A kill switch and many of its servers are optimized for fast torrenting.
Price-wise it is cost-efficient. Surfshark is compatible with P2P clients like BitTorrent and uTorrent, as well as streaming players.
CyberGhost is based in Romania (not a 5/9/14-Eyes Alliance member), provides a no-logs policy, has over 6000 servers spread over 90 countries, and provides 256-bit encryption. However, In the speed department, it falls short in comparison to the top two.
In terms of obfuscation, CyberGhost doesn’t work as well, rendering it less useful in high geo-censorship regions. Pricewise CyberGhost is more cost-efficient.
5. Private Internet Access
Private Internet Access is based in the USA (a member of the 5-Eye alliance). It claims a no activity-log policy, has over 26,000 servers in 77 countries which is one of the widest varieties. It provides 256-bit encryption and has a kill switch.
Price-wise, it is rather good. Its only downfall is the 5/9/14 Eyes alliance localization. Nevertheless, they claim a no activity-log policy.