Bitcoin wash trading surges on Binance and users exploited the platform’s lack of fees to earn VIP perks for fake high-volume trades but now, the CEO, Changpeng Zhao is cracking down on the problems so let’s read more today in our latest Binance news.
Binance CEO Changpeng Zhao is cracking down on wash trading that is happening on the platform after the company’s decision to remove fees for BTC spot trades. Bitcoin Wash Trading is when the traders sell and buy the assets from themselves or make fictitious trades like the NFT marketplaces LooksRare which sees plenty of wash trading because of the LOOKS token which is earned by using the site. The community-managed at Mandala Exchange noticed that a large volume of BTC was traded in a short period of time but the BTC price barely changed. This suggested that a huge number of traders were buying and selling which kept the price stable.
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
Zhao explained that the exchange will exclude BTC trading from the VIP Calculations and will remove the incentives to wash trade:
“Think this is due to zero fees and people trying to gain VIP tiers.”
Bitcoin wash trading surges on Binance and the platform now has nine different VIP Tiers each of which lower user fees for the currencies listed on the platform. The more funds a suer spot traded in 30 days, the higher their VIP tier will be. The tier system that rewards high trading volumes and offers perks for trading, charges low to no fees which can be vulnerable to manipulation and wash trading. In a few hours, Binance issued an announcement for 13 different bitcoin spot pairs from the VIP tier benefits and the spot liqudity provider program. The changes were made to brign a fair trading environment for the users.
The exchange made the decision to remove BTC spot trading fees on the fifth anniversary and compared to other struggling crypto companies such as Celsius and BlockFi or even Coinbase, Binance seems to be holding strogn on the bear market. It announced it will be sponsoring the Weeknd, the popular artists, and his upcomign world tour, and even unveiled a substantial social media and NFT partnership with Cristiano Ronaldo as the most popular person on Instagram. Zhao had some thoughts on the FTX strategies and when it comes to the loaning funds to ailing companies but also acquiring companies at a later date:
“I would never do that type of deal.”
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