Binance Disabling Registrations? (January 2018)
In December 2017/January 2018, many Bitcoin exchanges have been disabling registrations for new users. Some users are claiming that these exchanges plan to shut down and run away with user funds, others claim that this is just because of popular demand.
In this post we'll go through which exchanges are affected, and why this is happening.
What exchanges are affected?
As of the 8th January 2018, these exchanges have disabled new user registrations:
- Bittrex (since December 15th 2017)
- Bitfinex (since December 21st 2017)
- CEX (since December 21st 2017)
- Binance (since January 5th 2018, they look to be enabling them again on the 8th January - but are now having performance issues)
- Cryptopia (since January 6th 2018)
- Trade Satoshi (since January 7th 2018)
Why are exchanges disabling new registrations?
A post by one of the co-founders of Cryptopia sums the current situation up very well. Interest in Bitcoin and cryptocurrencies in December 2017 skyrocketed to 3 times that of November 2017. Cryptopia for example had 500,000 users on the 1st December, and reached 1.4 million on the 6th January. In just over a month their user base tripled. This correlates well to the 3x increase in search traffic in December.
Even in related areas like portfolio trackers there's been significant growth in December 2017; our own Portfolio Tracker has seen a 5x increase in signups in the past month.
If the other exchanges on the list above are seeing similar increases, which is very likely, then it's no surprise they've had to disable signups for new users. Posts made on the 5th December when Binance closed signups was that they were receiving as many as 250k new signups in a single day.
This is also linked to a crack down on regulation recently, where exchanges operating in countries like China and the US are having to put more effort into KYC, which stands for 'Know Your Customer'. KYC's goal is to prevent things like money laundering, which is done by checking new users are who they say they are - through things like passport and utility bill verification. A big problem here is that part of this process normally requires a real person to verify this information, not an automated system (sometimes this is a legal requirement). With this spike in registrations, if exchanges didn't disable signups - new users would have to wait longer and longer to get verified due to a backup of KYC checks.
The final factor is banking. For any exchange to operate (especially fiat exchanges like Bitfinex and CEX) they require a bank account to allow deposits/withdrawals, and for crypto-crypto exchanges they need one for things like paying bills and employees. For an exchange to hold all of their assets in crypto, this would be a massive risk - what if there was a temporary drop in crypto price, they might not be able to pay their employees. If an exchange is having issues with banking they may be very secretive, as it would damage their reputation - but for a fiat exchange in particular to disable new signups for more than 1 or 2 weeks, this could be a sign of banking problems - and might be a good time to move some of your crypto to a wallet in-case the problem escalates and they're forced to shut down.
Can I buy an exchange account from someone?
You need to be very careful here. Many exchanges, like Binance, have strict rules against buying/selling of accounts. It may be possible to buy an unverified account with no apparent link to the previous owner, but if an exchange finds out about this they may close the account and freeze any funds in it. Buying a verified account is even more risky, as it will be linked to the original owner's identity - so they could possibly claim it back at any point.
It would be better to be patient, or to look for an alternative exchange. Almost all coins are traded on more than one exchange, and those that aren't likely soon will be (normally coin prices go up when added on larger exchanges, so look out for them being added on smaller ones - so you can sill buy them cheaply).
What exchanges are still allowing signups?
Well the vast majority of exchanges aren't affected by this. The ones above are generally the largest, and so worst affected. Going through exchanges on CoinMarketCap, sorted by higher trade volume first, is a good way to find alternative exchanges.
We've also posted a guide on some alternatives to Binance here.
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Written by the Anything Crypto team
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