Understanding BNB Beacon Chain: The Backbone of the BNB Ecosystem

The BNB Chain, formerly Binance Chain, has become a major player in the cryptocurrency world. But what exactly is the BNB Beacon Chain, and how does it fit into the larger BNB ecosystem?
The Two Sides of the Coin
The BNB Chain is actually comprised of two blockchains:

• BNB Beacon Chain (BC): This is the governance layer, responsible for staking, voting, and overall network security. It uses a Proof-of-Stake (PoS) consensus mechanism, where users lock up their BNB tokens to validate transactions and earn rewards.
• BNB Smart Chain (BSC): This is the programmable side of the chain, compatible with the Ethereum Virtual Machine (EVM). This allows developers to easily build decentralized applications (dApps) and smart contracts on the BSC.

The Beacon's Role
The BNB Beacon Chain acts as the foundation for the entire BNB ecosystem. Here are its key functions:

• Security: The PoS mechanism ensures the secure operation of the entire BNB Chain.
• Staking & Governance: Users can stake their BNB tokens to participate in network governance and earn rewards.
• Native Token (BNB): The BNB Beacon Chain's native token, BNB, is used for staking, transaction fees, and various utilities within the BNB Chain ecosystem.

BEP2 vs. BEP20
It's important to note that the BNB Beacon Chain uses the BEP2 token standard for its native BNB token. This differs from the BEP20 standard used on the BSC, which is compatible with ERC-20 tokens on Ethereum. BEP2 tokens are limited to the BNB Beacon Chain network.
What's the Future Hold?

The future of the BNB Beacon Chain seems bright. With its focus on security, scalability, and a thriving developer community, the BNB Chain is well-positioned to continue its growth. However, there's a caveat. Recent announcements suggest the BNB Beacon Chain (BEP2) might be undergoing a sunset process in the coming months. It's recommended to stay up-to-date on any official announcements from Binance regarding the BNB Beacon Chain.History

5 years birthday Binance cake in Paris in July 2022.

2013–2017: company beginnings and move out of China

CEO Changpeng Zhao founded Fusion Systems in 2005 in Shanghai; the company built high-frequency trading systems for stockbrokers. In 2013, he joined Blockchain.info as the third member of the cryptocurrency wallet's team. He also worked at OKCoin as CTO for less than a year, a platform for spot trading between fiat and digital assets.[15] He was hired at this position in 2014 by Yi He, with whom he co-founded Binance several years later.[4]
The company was founded in 2017 in China but moved its servers and headquarters out of the country in advance of the Chinese government's ban on cryptocurrency trading in September 2017.[16] Zhao asked He to join Binance, and she helped rewrite parts of the white paper for Binance's $15 million initial coin offering.[4]

2018–2019: launch of stablecoin and security breach

In January 2018 it was the largest cryptocurrency exchange with a market capitalization of $1.3 billion,[17] a title it had retained as late as April 2021, despite competition from Coinbase, among others.[18]
In March 2018, Binance announced its intentions to open an office in Malta after stricter regulations in Japan and China.[19] In April 2018, Binance signed a memorandum of understanding with the government of Bermuda.[20] Months later, a similar memorandum was signed with the Malta Stock Exchange to develop a platform for trading security tokens.[21] In 2019, the company announced Binance Jersey, an independent entity from its parent Binance.com exchange, with the aim to expand its European influence. Jersey-based exchange offers fiat-to-cryptocurrency pairs, including the Euro and the British pound.[22]
In April 2018, Binance launched the Binance Charity Foundation. The charity's goal is to support the advancement of blockchain-enabled philanthropy with a focus on third-world countries.[23]
In June 2018, Binance and three other firms raised $65 million for sports blockchain company Chiliz.[24]
In July 2018, Binance acquired Trust Wallet, a decentralized cryptocurrency wallet for an undisclosed sum. However, Binance, confirmed that the compensation is a mixture of cash, Binance stock, and a portion of its BNB token.[25]
In August 2018, Binance along with three other big exchanges raised $32 million for a "stablecoin" project. The idea of stablecoins is to provide a cryptocurrency without the notorious volatility of Bitcoin and other popular digital assets.[26]
In January 2019, Binance announced that it had partnered with Israel-based payment processor Simplex to enable cryptocurrency purchases with debit and credit cards, including Visa and Mastercard. The purchases are subject to Simplex's local bank policies and are limited to Bitcoin, Ethereum, Litecoin and Ripple's XRP.[27]
On 7 May 2019, Binance revealed that it had been the victim of a "large scale security breach" in which hackers had stolen 7,000 Bitcoin worth around $40 million at the time.[28] Binance CEO Changpeng Zhao said the hackers "used a variety of techniques, including phishing, viruses and other attacks" and structured their transaction "in a way that passed our existing security checks."[29] Binance halted further withdrawals and deposits but allowed trading to continue. The site pledged to reimburse customers through its "Secure Asset Fund for Users (SAFU)".[30][31] Withdrawals resumed by 19 May.[32][better source needed]
In June 2019 the company announced it would prohibit US passport holders as well as anyone residing in the US, and would set up a new entity binance.us to support those customers.[33] Later in 2023 Forbes leaked a document allegedly from Binance titled "TaiChi" that proposed this regulatory solution to reduce US regulatory risk.[34] Binance subsequently denied the document, sued Forbes for defamation, and subsequently dropped the lawsuit.[35]
In September 2019, the exchange began offering perpetual futures contracts, allowing leverage as high as 125 times the value of the contracts.[36] In November 2019, Binance announced it was acquiring Indian bitcoin exchange WazirX, which became disputed in August 2022 when Binance founder Zhao claimed the deal was never signed.[37]

2020–2023: acquisitions and investments

On 21 February 2020, the Malta Financial Services Authority (MFSA) issued a public statement responding to media reports referring to Binance as a 'Malta-based' cryptocurrency company. The statement noted that Binance "is not authorized by the MFSA to operate in the cryptocurrency sphere and is therefore not subject to regulatory oversight by the MFSA." The MFSA added that it was "assessing if Binance has any activities in Malta which may not fall within the realm of regulatory oversight."[38]
In July 2020, Binance announced a "strategic partnership" with a Chinese state-owned enterprise under the State-owned Assets Supervision and Administration Commission of the State Council and that Binance had joined a group "aiming to facilitate" the Belt and Road Initiative.[39][40]
On 28 October 2020, Forbes staff released leaked documents showing that Binance and Changpeng Zhao created an elaborate corporate structure designed to intentionally deceive United States regulators and secretly profit from cryptocurrency investors located in the country.[5] Binance officially blocks access from IP addresses located in the United States, but "potential customers would be taught how to evade geographic restrictions", Forbes claimed.[5]

In May 2021 it was reported that Binance was under investigation by both the Internal Revenue Service and the United States Department of Justice on allegations of money laundering and tax offenses.[10][11]

References

1. ^ Hyatt, John; Bambysheva, Nina (5 April 2022). "The Wealthiest Person In Crypto Climbs Into World's 20 Richest". Forbes.
2. ^ Berwick, Angus; Wilson, Tom (21 January 2022). "Crypto giant Binance kept weak money-laundering checks even as it promised tougher compliance, documents show". Reuters.
3. ^ Wilson, Tom; Berwick, Angus (17 October 2022). "How Binance CEO and aides plotted to dodge regulators in U.S. and UK". Reuters.
4. ^ Jump up to:
5. a b c Muyao Shen; Justina Lee (28 June 2023). "Crypto's Most Powerful Woman Speaks Out as Crisis Rocks Binance". Bloomberg News. Wikidata Q120053402. Retrieved 28 June 2023.
6. ^ Jump up to:
7. a b c "Leaked 'Tai Chi' Document Reveals Binance's Elaborate Scheme To Evade Bitcoin Regulators". Forbes. 28 October 2020. Retrieved 30 October 2020.
8. ^ Clayton, James (21 November 2023). "Binance chief Changpeng Zhao pleads guilty to money laundering charges". BBC.
9. ^ Tully, Shawn (28 March 2023). "How Binance really operates: The world's largest crypto exchange boasts vast profits, hefty influencer payouts, and a ticking time bomb on its balance sheet". Fortune. Archived from the original on 9 April 2023.
10. ^ Kowsmann, Patricia; Ostroff, Caitlin (14 July 2023). "Binance Lays Off Over 1,000 Employees". The Wall Street Journal. Archived from the original on 17 July 2023.
11. ^ "Who Is Guangying Chen, and Is Binance a "Chinese Company"?". Binance Blog. 1 September 2022. Retrieved 23 May 2023. We have subsidiaries in many countries, including France, Spain, Italy, UAE, and Bahrain,
12. ^ Jump up to:
13. a b "Crypto Exchange Binance Under IRS and DOJ Investigation". Daily Newsbrief.
14. ^ Jump up to:
15. a b Schoenberg, Tom (13 May 2021). "Binance Faces Probe by U.S. Money-Laundering and Tax Sleuths". Bloomberg.com. Archived from the original on 13 May 2021. Retrieved 13 May 2021.
16. ^ Jump up to:
17. a b "Binance under investigation by Justice Department, IRS – Bloomberg News". Reuters. 13 May 2021. Retrieved 13 May 2021.
18. ^ "Consumer warning on Binance Markets Limited and the Binance Group". fca.org.uk. 26 June 2021. Archived from the original on 26 June 2021. Retrieved 8 December 2021.
19. ^ Berwick, Angus (22 April 2022). "Special Report: How crypto giant Binance built ties to a Russian FSB-linked agency". Reuters. Retrieved 22 April 2022.
20. ^ Ambler, Pamela (7 February 2018). "From Zero To Crypto Billionaire In Under A Year: Meet The Founder Of Binance". Forbes.
21. ^ Xiao, Eva (30 November 2017). "Three months after launch, this unbanked crypto exchange made $7.5m in profit". Tech in Asia.
22. ^ Nakamura, Yuji; Lun, Haidi (11 January 2018). "World's Top-Ranked Crypto Exchange Adds 240,000 Users in One Hour". Bloomberg.com. Retrieved 8 March 2018.
23. ^ de la Merced, Michael J.; Karaian, Jason (15 April 2021). "What's next for Coinbase?". The New York Times. ISSN 0362-4331. Retrieved 12 May 2021.
24. ^ Nakamura, Yuji (23 March 2018). "World's Biggest Cryptocurrency Exchange Is Heading to Malta". Bloomberg. Retrieved 24 March 2018.
25. ^ "The Continuing Development Of A Fintech Ecosystem For Bermuda" (PDF). Ber News. 27 April 2018. Archived (PDF) from the original on 19 January 2019. Retrieved 4 February 2021.
26. ^ plc, Malta Stock Exchange. "MSE and Binance sign MoU". Malta Stock Exchange. Archived from the original on 19 January 2019. Retrieved 19 January 2019.

]