Binance Earns More Than $20,000 per Day Overcharging on Transaction Fees

[Yaunfitda]

Binance Earns More Than $20,000 per Day Overcharging on Transaction Fees

If you are a regular Binance user, you are probably well aware that the cryptocurrency exchange charges a 0.0005 BTC withdrawal fee, irrespective of the size of the withdrawal or network fee requirements.

The 0.0005 BTC withdrawal fee is currently around 33 times higher than the average fee required to ensure transactions are mined on the next block.

https://beincrypto.com/binance-earns-more-than-20000-per-day-overcharging-on-transaction-fees/

It is interesting to note as well, based on that article that Binance still uses Legacy wallet as input address that can really ballooned the fees by x amount.

Anyways, it still boils down to business + profit, at the end of the end, those exchanges really needs to find ways to generate and squeeze every penny out of us, crypto traders.

[eaLiTy]

It is interesting to note as well, based on that article that Binance still uses Legacy wallet as input address that can really ballooned the fees by x amount.
Anyways, it still boils down to business + profit, at the end of the end, those exchanges really needs to find ways to generate and squeeze every penny out of us, crypto traders.

This is not a problem with Binance alone all of the exchanges have a very high withdrawal fees and 0.0005BTC is the standard fee and some exchanges even charge as high as 0.0015BTC HitBTC for example and CoinMex has the highest fees 0.002296BTC. There is no one protesting that and so is the reason they are continuing that old fees. If you are looking for free withdrawal fees go to Bitstamp and Coinbase Pro.

To know the complete list of withdrawal fees here is the exchanges and the fees they are charging.

[logfiles]

Of course most cypto exchanges have been very exploitative in every aspect but then again, you don't want to have many pending withdrawals from thousands of customers due to a sudden spike in BTC fees. So they have to overestimate the withdrawal fees just in case.

Binance withdraw charges are somewhat fair compared to other exchanges. You haven't seen withdraw charges of HitBTC or Yobit. Yobit for example currently charges 0.0012 BTC as withdraw fees... Ridiculous, isn't it?  

The lowest fees I have seen so far on the exchanges i have used are of bitmex and mercatox which is around 0.0003 BTC

[JeromeTash]

Maybe the excess transaction fees is to take care of the BTC dust in the different wallets. Anyways they also have to make profit at whatever opportunity they get.

To know the complete list of withdrawal fees here is the exchanges and the fees they are charging.

Honestly i never knew about this tool. Thanks for sharing... However, the USD price doesn't seem to be in line with the current BTC price. Would have been cool if they were matching but non the less it's awesome

[crwth]

If you are running your exchange and that happens to be one of the most well-known exchanges in the industry, that's going to be profitable, right? Without considering the Trading Fees either. They are advantageous for sure.

The concern with the wallet is that if they were to change or update a new wallet for it, it's going to be hard. Imagine a large amount of BTC in the exchange itself, and moving and upgrading a wallet would be somewhat interrupting with their business. I don't have the experience with that, but I know it could expose the wallet or something, could there be an exploit when doing that and stealing the funds?

[ChrisPop]

Well.. it is in their best interest to make the users keep their bags on their platform. I think you've seen what they are doing. Adding staking programs, lending, futures, etc. they want to become the one stop shop for everything related to crypto trading and financial. This is not good because we don't want BTC centralized in one place. If you take a worst case scenario where most BTC in circulation is held into BNB cold wallet and it gets hacked the whole crypto economy could collapse.

[Ucy]

It is interesting to note as well, based on that article that Binance still uses Legacy wallet as input address that can really ballooned the fees by x amount.
Anyways, it still boils down to business + profit, at the end of the end, those exchanges really needs to find ways to generate and squeeze every penny out of us, crypto traders.

This is not a problem with Binance alone all of the exchanges have a very high withdrawal fees and 0.0005BTC is the standard fee and some exchanges even charge as high as 0.0015BTC HitBTC for example and CoinMex has the highest fees 0.002296BTC. There is no one protesting that and so is the reason they are continuing that old fees. If you are looking for free withdrawal fees go to Bitstamp and Coinbase Pro.

To know the complete list of withdrawal fees here is the exchanges and the fees they are charging.

Thanks for this website:
https://withdrawalfees.com/coins/bitcoin

ANXPRO and CoinMex charge $20.73 and $23.80 respectively. I guess both exchanges are for traders with lots of money. I do not see how average traders would use the exchanges.

Exchanges with free withdrawal fees:

Bitstamp
Coinbase Pro
Liquid
Shake pay

[joniboini]

Binance name being used again by the media. I'd rather say crypto exchanges, in general, are overcharging on tx fees, but they go with Binance instead. Nice strategy for SEO.

Some exchange even charges for your deposit, such as Luno. That's way terrible. My local exchange is charging 1% for fiat withdrawal, that's a lot of money for me, especially considering bank transfer take less than $1 fee.

[BitHodler]

Binance was crowned to be the best exchange to have ever existed last year, while people are now slowly shifting back and start to see flaws in the way they operate.... that's a good thing because it makes people not blindly trust them anymore.

If we look at the 0.0005BTC withdrawal fee, it's much better than BTC-Es 0.001BTC, and much better than Yobit's 0.0012BTC. I would actually be quite happy with 0.0005BTC IMHO, but people as always want to pay close to zero in fees....

[magneto]

Unfortunately as a user, you have to comply with whatever fees and rules that they put out.

They could easily argue that the fees goes towards maintaining the security of their cold and hot wallets, as well as paying for dust inputs that come in deposits. Of course, that is very unlikely to consist the entire 0.0005 BTC and at least part of it is definitely going towards Binance themselves, but it is likely their PR response if this issue was ever raised and discussed.

It's actually quite common practice as well among exchanges to do this, not just Binance. If enough community goes to protest, there could potentially be changes made.

[exstasie]

Have you guys ever withdrawn from Binance? They overpay miner fees by a hilarious margin to make sure users never wait more than a block. Like this one: https://www.blockchain.com/btc/tx/4b5a77f55d9fc27d5a5f44d8d97457f9b0d77920c311a5bfcbae6e1b4938895f

They just paid 95 satoshis per byte when transactions are getting confirmed in the next block for 1 satoshi per byte......

Maybe the excess transaction fees is to take care of the BTC dust in the different wallets.

That's part of it too. Customers make lots of small deposits which results in lots of inputs and much more expensive transactions. They might be pocketing some money from this, but it's way less than the OP is insinuating.

[Google+]

indeed it has become very reasonable when the exchange place has a high trading volume and can provide trading comfort then the benefits of the exchange will also be more and more because there will be many who use the platform for trading.

[Casdinyard]

Binance name being used again by the media. I'd rather say crypto exchanges, in general, are overcharging on tx fees, but they go with Binance instead. Nice strategy for SEO.

Keywords tho HAHAHA!
Even binance has high fee traders still choose it over the others, even me, like why not if I can take profit easy because of their liquidity? That could be actually peanuts to some. And $20,000 a day isn't surprising, man that's a leading exchange site.

[1Referee]

If enough community goes to protest, there could potentially be changes made.

Meh. You sign up to a service with such withdrawal fees. It's not that they forced high withdrawal fees upon their users, unless they out of nothing increased their fees, then the story is different. In Binance's case, they haven't increased their fees so there really isn't much to complain about.

For the liquidity that they offer, and the wide variety of coin pairs, 0.0005BTC in fees isn't even that high. On top of that, whenever the network goes through some severe congestion again (which increases the fees for every user of Bitcoin), Binance got you covered with that 0.0005BTC fee.

Even when the on-chain fees jump above 0.0005BTC I'm sure they won't increase their fees immediately because the profits they generate from trading easily covers their withdrawal expenses.

[cryptothreads]

Binance was crowned to be the best exchange to have ever existed last year, while people are now slowly shifting back and start to see flaws in the way they operate.... that's a good thing because it makes people not blindly trust them anymore.

If we look at the 0.0005BTC withdrawal fee, it's much better than BTC-Es 0.001BTC, and much better than Yobit's 0.0012BTC. I would actually be quite happy with 0.0005BTC IMHO, but people as always want to pay close to zero in fees....

I think this is the minimum fee at all major exchanges and this is the way for them to do business in this market so I will not object to this issue. In fact, that fee will not affect your profit much because if you have accepted to participate in crypto, you must have enough money to pay for those amounts. Personally, I am still using Binance because it is a very good exchange and the withdrawal is usually very fast so the fee of 0.0005 BTC absolutely does not affect me much.

There are currently very few exchanges that are cheap and you should accept this fee when participating. Of course, many investors don't like this fee but they can't do anything else.

[LeGaulois]

I don't see where is the problem considering it's the average fee on a lot of other exchanges and as someone said, we don't see people shouting about it. Coinbase too charges the same IIRC, when they increased the miners we have seen a few people shouting here and there for a few days but finally they stopped and I'm sure they still use it as of today.

I believe the reasons they overcharge the TXs fee is to not see people claiming "It takes too much time to withdraw from xyz!" whatever it can be from social networks, useless support tickets, ...

People have been praising Binance for too long now, I know a day they will realize the mistake.
I mean $20k x 30 days = over half a million dollars monthly donated generously by user

If you are running your exchange and that happens to be one of the most well-known exchanges in the industry, that's going to be profitable, right? Without considering the Trading Fees either. They are advantageous for sure.

The concern with the wallet is that if they were to change or update a new wallet for it, it's going to be hard. Imagine a large amount of BTC in the exchange itself, and moving and upgrading a wallet would be somewhat interrupting with their business. I don't have the experience with that, but I know it could expose the wallet or something, could there be an exploit when doing that and stealing the funds?

Upgrading their wallets isn't a real problem, don't forget that they store the coins in cold storage and only keep an amount for the trading activity.
How do you think other exchanges managed to upgrade to Segwit and/or bech32 format address?

[Bttzed03]

Traders use the services provided by Binance and in return, Binance charges back. That's a normal practice in any business. If traders have a problem with that, they can always use another exchange or they can also ask help from regulators 

The concern with the wallet is that if they were to change or update a new wallet for it, it's going to be hard. Imagine a large amount of BTC in the exchange itself, and moving and upgrading a wallet would be somewhat interrupting with their business. I don't have the experience with that, but I know it could expose the wallet or something, could there be an exploit when doing that and stealing the funds?

Other major exchanges have already switched to segwit since last year though. It's probably not the priority of Binance right now because they are focused on listing altcoins both on CEX and DEX plus their IEOs or IDOs.

[BigBoy89]

It's half-true.
At Binance, and any other exchange, fees are not only moving coins to your wallet. But to move it on deposit, to move balances in-between, etc.

Still, it's unreasonably high and as I wrote 2-3 weeks ago: Exchanges are making more profit from withdrawal fees than trading fees when you are trading small. But if we want to use Binance liquidity and stability, we have to accept those fees.

[Vispilio]

On Binance, at least you can briefly convert your crypto holdings to an altcoin with much cheaper comissions and yet somewhat stable price and conduct a fast withdrawal (eg via TRX); other exchanges are admittedly more notorious for fees.

The big rip off in Binance was introduced by its new margin and futures products, where the liquidations have exponentially higher commissions and the maintenance margin is also way more expensive then competitors...

[BitcoinHunt3r]

I think 0.0005 BTC still cheaper than most of exchanges. We can see minimum fee for withdrawal usually reach 0.001 BTC. And with that, Binance really can maintain their site very well, although get attacked they still can make sure they are reputable. With their services, i think it is worth if we pay that fee.