Binance sees a wash trading spike putting the decision to make trading on BTC pairs free into question.
Binance, in a blog post late Friday, has revealed that it would be excluding 13 spot BTC pairs from trading volume calculations as a rise in wash trading is observed following the announcement of zero fees on BTC pairs.
“Think this is due to zero fees and people trying to gain VIP tiers. We will exclude Btc trading from VIP calculations. Remove all incentives to wash trade. Announcement with details coming shortly,” Binance’s Changpeng Zhao tweeted an hour before the latest announcement responding to an observation that $3 billion worth of Bitcoin had been purchased in just 2 hours with no effect on the BTC price.
Think this is due to zero fees and people trying to gain VIP tiers. We will exclude Btc trading from VIP calculations. Remove all incentives to wash trade. Announcement with details coming shortly. https://t.co/5wm4uPAudX
— CZ ? Binance (@cz_binance) July 8, 2022
Wash trading is a practice where investors buy and sell the same financial instrument simultaneously. The practice is illegal as it can allow investors to misrepresent the demand for a particular asset.
Following the decision, Binance’s CZ took to Twitter to create a poll to see if users still wanted zero fees on Bitcoin pairs revealing that maintaining free trading on Bitcoin would take a lot of work. However, he added that the exchange was willing to tough it out if the community decided it should.Â
“So, it’s a lot of work to bring you 0 fee trading. We won’t have to do all these work if you don’t want it. Let’s see what the poll say. We listen to our users,” CZ tweeted.
4/ So, it's a lot of work to bring you 0 fee trading. We won't have to do all these work if you don't want it. Let's see what the poll say. We listen to our users. ?
— CZ ? Binance (@cz_binance) July 8, 2022
At the time of writing, most users have voted for the free trading on BTC pairs to stay, with 66% voting yes.
Binance launched free trading on Bitcoin pairs on Friday as it celebrated its 5th anniversary. Notably, the move is set to heat up the competition between crypto exchanges.
It is worth noting that Binance is one of the few exchanges with plans to expand despite the crypto market downturn. Competitors like Coinbase and Gemini have had to downsize to cut costs even as trading activities decline, putting extra strain on exchange revenue.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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