Binance vs. Robinhood: Which Crypto Exchange Is Right for You?

Binance and Robinhood are on two opposite ends of the spectrum. While Robinhood is a stockbroker that offers a limited range of cryptocurrencies alongside other assets such as stocks and ETFs, Binance is a sprawling cryptocurrency exchange with a huge mix of coins and tokens, products, and services. Binance is also facing significant regulatory challenges, which weigh heavily in our comparison. Find out how the two stack up in our full Binance vs. Robinhood review, including fees, security, available cryptos, and other features.

Important note: On June 5, 2023, The SEC filed 13 charges against Binance and its CEO Changpeng Zhao for securities violations. We recommend staying away from Binance and Binance.US while this all shakes out -- consider another top cryptocurrency exchange instead.

The way crypto is regulated could have a big impact on crypto traders in the U.S., particularly as the Securities and Exchange Commission (SEC) brought charges against several crypto platforms in June 2023. It says that a number of popular cryptocurrencies -- such as Solana, Cardano, and Polygon -- are unregistered securities. This means they should have registered with the SEC and followed strict rules about reporting and trading. If the SEC wins its case, it will mean many cryptocurrencies and platforms have been operating without the proper registration or licenses.

Regulation is a crucial difference between Robinhood and Binance. Robinhood is regulated by the SEC and also qualified for New York's BitLicense, which is one of the hardest crypto trading licenses to get. The SEC subpoenaed Robinhood over its crypto offerings in February 2023, but as yet no further action has been taken.

In contrast, the SEC's accusations against Binance go beyond the charge of acting as an unregistered broker. SEC Chair Gary Gensler says Binance, Binance.US, and founder Changpeng Zhao, "Engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law." Binance says it intends to vigorously defend the platform. It may take time for the accusations to play out in court, but the case is already having an impact on Binance's operations. Binance.US no longer accepts U.S. dollar deposits or withdrawals, because payment providers don't want to work with the company. Binance International is having similar issues in the U.K. and Europe.

Cryptocurrency exchange fees can vary dramatically from platform to platform, and it isn't always easy to see what you'll be charged. For example, Binance has an easy-to-use convert function that lets you exchange one crypto for another. However, the fees don't work in the same way as with spot trading.

Bear in mind that trading fees are not the only costs -- you may also have to pay to deposit money on a platform. It's usually free to deposit fiat money (traditional currency like U.S. dollars) via a bank transfer, but other methods can be costly.

Robinhood fees

At first glance, Robinhood's zero commission fee structure puts it ahead in terms of trading fees. Robinhood, which pioneered commission-free stock trading, doesn't charge trading fees on crypto transactions. However, be aware that all platforms make money somewhere. Robinhood charges a spread, which is essentially the difference between the current market price and the price you pay. The broker is not transparent about the size of its spread, so investors might not get the best exchange rate.

Here's a quick overview of Robinhood's fees:

• Robinhood offers zero commission trading, but customers will pay a spread, so it's a good idea to compare the rate against other platforms.
• It's free to deposit money via bank transfer or debit card with Robinhood.
• Robinhood Wallet users don't have to pay a fee for token swaps, but other transactions (such as withdrawing to an external wallet) may incur blockchain transaction fees.

READ MORE: Full Robinhood Review

Binance fees

Binance has built a reputation as a low-fee trading platform. Binance users can reduce fees by paying with its utility token, Binance Coin (BNB). High-volume traders can also access lower fees.

Here's a quick overview of Binance fees:

• Binance charges a maximum maker/taker fee of 0.1% on spot trading.
• Fees to deposit via debit card, credit card, or other options vary depending on payment method and country.
• Like Robinhood, customers in most countries can deposit money via bank transfer for free.
• Binance offers zero-fee trading for certain Bitcoin and TUSD pairs

READ MORE: Full Binance Review

Binance.US fees

As with the main Binance platform, reduced trading fees are available for BNB payments and high volume traders. Binance.US also offers 0% trading on a handful of Bitcoin and Ethereum pairs.

Here's a quick overview of Binance.US fees:

• The maximum spot trading fee is 0.45%, with reductions for BNB payments and high volume traders.
• Investors who use the instant buy or convert function will pay a variable trading fee.
• Binance.US is becoming a crypto-only exchange, meaning it will not accept U.S. dollar deposits or withdrawals.

READ MORE: Full Binance.US Review

Unlike Binance and Binance.US, Robinhood has a very limited range of available cryptos. It offers around 15 cryptocurrencies, and only a couple are in the top 10 cryptocurrencies by market cap. Robinhood has already delisted Solana, Cardano, and Solana, in response to the SEC's charges.

Here's a summary of the available cryptos for Binance vs. Robinhood:

READ MORE: Cryptocurrency Availability: Where Can You Buy Your Favorite Tokens?

Crypto wallets have taken on a new importance since the collapse of FTX and other popular exchanges. Unfortunately, if a crypto platform fails, investors don't have the benefit of FDIC insurance as they would with a bank. This means that if you leave your funds on a centralized platform -- also known as a custodial wallet -- your assets could get tied up in bankruptcy proceedings. One way to protect yourself is to move your crypto to a wallet you control.

Both Binance and Robinhood offer non-custodial wallets, though they work differently. Binance partners with Trust Wallet and also allows customers to withdraw assets to popular crypto wallets, such as MetaMask or Ledger. Robinhood's wallet sets it apart from other crypto brokerages, which don't make it easy for customers to move their assets. However, it doesn't have as much functionality as more established crypto wallets -- particularly in terms of the number of blockchains and supported tokens.

The big advantage of a noncustodial crypto wallet is that your assets are less at risk if your crypto exchange gets hacked or fails. The disadvantage is that you are responsible for the security and maintenance of your wallet. There's no handy "forgot password" function, and if you lose the seed phrase -- a series of words that act as a type of master password -- you could lose access to your crypto.

When you deposit your hard-earned money with a crypto platform, it's important to know how that platform will keep your assets safe, and also that it will not take unnecessary risks with any client funds.

Robinhood has many of the security features we look for on a crypto exchange:

• Keeping assets offline in cold storage
• Having third-party insurance to protect against hacking
• Using external security experts

Similarly, Binance says it stores the vast majority of user funds in cold storage. It also puts a percentage of trading fees into its Secure Asset Fund for Users, designed to make clients whole in the event of a security breach. Binance announced in January 2022 that the fund was worth over $1 billion. Binance.US says that it always maintains 1:1 reserves for customer assets and that security is its top priority. According to its website, it has industry-leading security controls and its systems are subject to regular external audits. However, it would be nice to see a transparent statement about, for example, what percentage of its assets are kept in cold storage. At a security level, several of the SEC charges are worrying -- it says Binance.US, "misled investors about non-existent trading controls over the Binance.US platform." Binance has hit back, saying, "Any allegations that user assets on the Binance.US platform have ever been at risk are simply wrong."

Binance and Robinhood are very different companies, and not only because of their approach to regulation. Robinhood offers a limited number of cryptos alongside other investments such as stocks and ETFs. Robinhood may be a good option for cryptocurrency investors who want to add a small amount of crypto to their existing investment portfolio, or those who want a platform that prioritizes regulatory compliance.

Binance may boast low fees and a considerable range of cryptos, but until there is more clarity about the accusations hanging over it, it makes sense to look at other exchanges. The world of crypto is risky enough without putting your funds on a platform that's being accused of misleading its customers.

Now that you've read our Binance vs. Robinhood comparison, you might decide that neither platform is quite what you're looking for. If that's the case, check out our list of top crypto apps and exchanges for more options. There are many great places to invest in crypto and it's worth taking the time to find one that's right for you.