Binance, a major cryptocurrency exchange, has introduced a new feature that will stop users from self-trading on the platform.
Binance unveiled the Self-Trade Prevention (STP) feature in a blog post on January 25 for customers who use the platform’s spot trading API to trade on the spot market.
The new feature, which becomes operational on January 26, tries to stop the execution of orders that can lead to self-trade. Self-trading happens when the same users are on both sides of a deal, indicating that the ownership of the traded asset has not changed.
Such behavior is a type of market manipulation that gives the appearance of trade activity. Binance pointed out that certain inadvertent self-trading operations did occur.
The blog article claims that experienced traders who employ numerous methods simultaneously run the risk of mistakenly matching two orders coming from the same trading desk.
The exchange giant emphasized that, despite the platform’s acknowledgment of such mishaps, the company’s conditions of service forbid purposeful self-trades.
The adoption of STP enables customers to avoid paying fees on pointless trades and reduces unintentional self-trading activities. Customers who trade on the Binance website, desktop, or mobile apps cannot use the new capability because it is intended for API users only.
The debut of Binance’s new tool comes as the cryptocurrency exchange battles FUD from rivals. In a recent article published by crypto.news, the CEO of the firm, Changpeng Zhao, alleged that a bankrupt competitor, FTX, had paid over $43 million to a cryptocurrency news website to post unfavorable information about Binance.
