Crypto Decoded

What is BNB, and what is Binance?

BNB is Binance's native cryptocurrency. Here's what it does, how BNB Chain works, and what the exchange's regulatory history means for UK investors.

By Oliver Crane · May 18, 2026

Most people who have looked into buying crypto have come across Binance. It is the largest cryptocurrency exchange in the world by trading volume, and BNB is the coin that powers it. But BNB has grown into something larger than a loyalty token for one platform, and Binance has attracted as much controversy as it has customers. Here is what both actually are.

Reviewed by Priya Nair, Editorial Director · May 18, 2026, 22:34

In this article

The Short Version

Binance is the world’s largest cryptocurrency exchange by trading volume, founded in 2017 by Changpeng Zhao (known as CZ).
BNB is the native cryptocurrency of the Binance ecosystem. It was originally called Binance Coin and was launched to give traders a discount on exchange fees.
BNB now also powers BNB Chain, a separate blockchain used by thousands of decentralised applications.
Binance has faced serious regulatory action in multiple countries, including a $4.3 billion settlement with US authorities in 2023 and CZ’s subsequent guilty plea and resignation.
UK investors need to check Binance’s current FCA registration status before using the platform, as this has changed more than once.

What Binance Is and How It Works

Binance launched in 2017 and grew rapidly to become the dominant force in global crypto trading. At its peak it was processing more transactions daily than the next several exchanges combined. It offers spot trading, futures, options, staking, lending, and a marketplace for NFTs, all under one roof. The exchange is run by Binance Holdings Limited, a company registered in the Cayman Islands, though it operates globally through various subsidiary entities. That deliberately fragmented structure has been a source of friction with regulators in multiple countries, who found it difficult to establish clear jurisdiction. CZ, the founder, became one of the most recognised figures in crypto. He stepped down as CEO in November 2023 as part of a legal settlement with US authorities (more on that below). Richard Teng, a former regulator himself, took over as CEO. For ordinary users, Binance works like most other centralised exchanges: you create an account, verify your identity, deposit funds, and trade. The platform is generally considered to have deep liquidity and tight spreads, which makes it popular with active traders. It also has a reputation for complexity: the range of products on offer is vast, and it is not always the easiest platform for beginners.

What BNB Is and Why It Exists

BNB was created in 2017 as a utility token for the Binance exchange. The original purpose was straightforward: holders received a 25 per cent discount on trading fees if they paid in BNB. That made it a practical incentive to hold rather than a speculative asset. Over time the use cases expanded considerably. BNB is now used to pay transaction fees on BNB Chain (the blockchain Binance built and maintains), to participate in token sales on Binance Launchpad, and as a payment method in various applications built on top of the Binance ecosystem. Binance also runs a regular token burn programme. Each quarter, a portion of BNB is permanently destroyed, reducing the total supply. The original supply was 200 million BNB, and burns are intended to continue until half of all BNB has been removed from circulation. In theory, a shrinking supply combined with steady or growing demand supports the token’s value over time. In practice, the price of BNB, like all crypto assets, is heavily influenced by broader market conditions. The name change is worth noting. What was called Binance Coin officially became BNB in 2022, partly to reflect that the token’s identity had grown beyond the exchange itself.

BNB Chain: The Blockchain Behind the Token

BNB Chain is a blockchain network maintained by Binance and a set of validators. It was originally launched as Binance Smart Chain (BSC) in 2020 and was designed to be compatible with Ethereum’s developer tools, which made it straightforward for developers to port existing Ethereum applications across. BNB Chain processes transactions faster and more cheaply than Ethereum’s mainnet. That made it attractive during the 2020 and 2021 DeFi boom, when Ethereum gas fees became prohibitively expensive for smaller transactions. Thousands of decentralised exchanges, lending protocols, and yield farming applications launched on BNB Chain during this period. The trade-off for that speed and low cost is centralisation. BNB Chain uses a proof of staked authority consensus mechanism, which means a relatively small number of validators approve transactions. Critics have pointed out that Binance effectively controls a significant portion of these validators, which runs counter to the decentralisation ideals that underpin much of the crypto space. The network has experienced outages and exploits, some of which resulted in significant losses. In 2022 BNB Chain was rebranded from Binance Smart Chain, and a second layer, opBNB, was added as a layer-2 network designed to handle even higher transaction volumes at lower cost.

The Regulatory Trouble Binance Has Faced

Binance’s regulatory history is one of the most significant in the crypto industry. In November 2023, Binance agreed to pay $4.3 billion in fines to US authorities, including the Department of Justice, the Financial Crimes Enforcement Network, and the Commodity Futures Trading Commission. The charges related to failures in anti-money laundering controls and sanctions compliance. CZ personally pleaded guilty to one charge under the Bank Secrecy Act, paid a $50 million fine, and stepped down as CEO. In the UK, Binance Markets Limited had its registration with the Financial Conduct Authority (FCA) cancelled in 2021 following concerns about its ability to meet regulatory requirements. The UK entity later reapplied and the FCA’s position on Binance’s UK operations has continued to evolve. Readers should check the FCA register directly for the current status before using any Binance entity, as this is an area where the situation has changed more than once and could change again. Other jurisdictions including Canada, Japan, Germany, and the Netherlands have also issued warnings or restrictions relating to Binance at various points. The overall picture is of a company that expanded aggressively ahead of regulatory frameworks and has spent several years working through the consequences.

What UK Investors Need to Know About BNB Specifically

BNB can be bought and sold on various exchanges, not only Binance itself. As a cryptocurrency asset, it falls under HMRC’s guidance for crypto taxation in the UK. Any disposal (including trading one crypto for another) is a taxable event, and capital gains rules apply. Staking or earning BNB as income would also have tax implications. Because BNB’s value is closely tied to Binance’s fortunes as a business, it carries a form of platform risk that is distinct from purely decentralised crypto assets. If Binance faces further regulatory action, sees a significant drop in trading volume, or encounters a serious security incident, BNB’s price would likely be affected directly. That concentration of risk is worth understanding before treating BNB as just another altcoin.

A Worked Example

Suppose you are an active trader using Binance and you pay roughly £50 per month in trading fees. If you hold enough BNB in your account and enable fee payment in BNB, Binance applies a discount to those fees. Historically this was 25 per cent, meaning you would save £12.50 per month, or £150 per year. To maintain that benefit, you hold BNB. If BNB increases in value during that period, you benefit twice: from the fee savings and from the price appreciation. If BNB falls in value, the fee savings remain but you may have lost more on the BNB holding itself than you saved in fees. The utility is real, but it does not insulate you from the underlying volatility of the asset.

What This Means For You

BNB is not a scam token, and Binance is not a fraudulent exchange. Both are large, established parts of the crypto infrastructure that hundreds of millions of people use. At the same time, BNB’s value is structurally tied to a single company’s regulatory fate and commercial performance in a way that more decentralised assets are not. If you use Binance regularly and want to reduce your fee costs, BNB has a clear and practical use case. If you are considering BNB as a speculative investment, the concentration risk from Binance’s regulatory situation is a factor worth weighing seriously. As always, the question is not whether the asset or platform is legitimate, but whether the specific risk profile suits your situation.

In Plain English

Binance is a very large crypto exchange. BNB is the coin it created, originally to give traders cheaper fees. BNB now also runs a separate blockchain used by many crypto applications. Binance has had major legal problems in the US and regulatory friction in the UK, which creates a risk that is baked into BNB’s value in a way that is worth understanding before you buy.