APR6.2%(Variable)
Risk score90High
Founded by Changpeng Zhao (CZ) in 2017, Binance Holdings Ltd. has grown into the world's largest crypto exchange by volume. Now steered from the United Arab Emirates under CEO Richard Teng, it offers spot and derivatives trading, staking, cards and an NFT marketplace, serving about 240 million customers across 180-plus countries.
Interest rate
Variable (e.g. 6.2%)
Currency support
USDC, USDT, ETH, Others
Fees
0%
Collateral
BTC, ETH, BNB, Others
LTV
Up to 78%
Loan type
Consumer
Liquidation LTV
91%
Margin call
85%
KYC
Yes
Total loan issued
N/A
Launch year
2023
Loan duration
Flexible
Support
Chat
Loan value
$1 - $5,500,000
Total risk score90High
Collateral
0/10
What are you pledging? Native BTC is safest; wrappers, bridges, or paper IOUs add redemption risk.
Native BTC (on-chain UTXO).
Rehypothecation
7/10
Will your BTC be re-used? More hidden leverage → bigger blow-up chance.
BTC used as collateral for Binance Loans (Flexible Rate) is automatically subscribed to Simple Earn, where it can be re-lent via Margin and Loan products—a clear case of rehypothecation beyond internal segregation.
Custody
7/10
Who can move the coins? Scores quorum design, recovery paths, and (for CeFi) bankruptcy-remote segregation.
Centralised, pooled hot-/cold-wallet custody run by Binance; no independent qualified custodian or bankruptcy-remote segregation.
Security & Governance
7/10
How battle-tested are code and ops? Counts audits, bug-bounty, certs, and hardware key isolation.
Retail assets are swept from user deposit addresses into Binance-controlled omnibus hot wallets, so balances remain pooled without on-chain segregation. Its Merkle-tree proof-of-reserves is produced internally and has lacked an external auditor since Mazars halted PoR work in Dec 2022, leaving custody controls unaudited. Binance also suffered a 7,000 BTC hot-wallet breach in May 2019, and the segregated MPC cold-storage offered via Ceffu is marketed solely to institutional clients, not to retail funds.
Platform
0/10
Is the chain or bridge robust? Rates consensus security and smart-contract attack surface.
Native Bitcoin script.
Oracle
7/10
How is price fetched and signed? Independence, on-chain proofs, refresh speed, circuit breakers.
Binance runs its own Price Index (no third-party feed) to set LTV and liquidation thresholds. The index blends ≥10 major exchanges (KuCoin, OKX, Coinbase, Kraken, Bitfinex, Bybit, etc..), but Binance fully controls the oracle and can reweight it at will. No independent signers or on-chain proof.
Liquidation Buffer
4/10
How much room and time before liquidation? Combines LTV gap, grace window, and flash-crash guards.
13pp buffer (78% → 91%). Margin call at 85% with no stated grace window.
Rate & Term
7/10
Can interest spike mid-loan? Looks at fixed vs variable APR and funding duration match.
Under Binance's Flexible Rate Loan, the interest rate floats minute-by-minute with no stated cap; borrowers bear the full rate volatility.
Transparency
4/10
Can outsiders verify code & solvency? Rewards open-source + live PoR; punishes black boxes.
Publishes in-house Merkle tree Proof-of-Reserves snapshots for assets only, while liabilities and full financials remain undisclosed. Individual loan UTXOs are not visible; only aggregated balances across exchange wallets are presented.
Loan Currency
4/10
What asset do you borrow? Native-BTC best; fiat stables graded on reserves, audits, censorship risk.
Wide range of cryptocurrencies including USDC, USDT, ETH, and others.
Privacy
10/10
How exposed is your identity? Scores KYC depth, data storage, and breach history.
Mandatory KYC with a confirmed 2019 leak exposing up to 60,000 users’ identity documents.
History
7/10
Have they proven themselves? Measures years in production, audit/OSS footprint, and incident track record.
A major 7,000 BTC hack in 2019 and a US$4.3 billion settlement with the DOJ and FinCEN in 2023 highlight serious past failures in security and compliance — though users were reimbursed. Additionally, a 2019 data leak exposed identity documents of up to 60,000 users.
Jurisdiction
4/10
Which legal system backs you? Rates clarity of licensing, creditor rights, and enforcement.
Binance's lending arm operates under a Dubai VARA VASP licence issued 15 Apr 2024 that explicitly covers "Lending and Borrowing Services," giving it a formal (but still young) regulatory footing. Disputes, however, are governed by Hong Kong law with HKIAC arbitration, and the firm still has no settled global headquarters, leaving creditors to rely on contract arbitration rather than a proven bankruptcy court.