Binance Expands Self-Transaction Prevention Tool to Curb Unintentional Self-Trading
Summary:
Binance, a leading cryptocurrency exchange, is expanding its self-transaction prevention (STP) feature across all of its spot and margin trading platforms from October 26. The STP tool, introduced in January 2023, prevents unintentional self-trading, where API users can end up trading with themselves unintentionally, incurring unnecessary fees. The exchange also actively discourages intentional self-trading, labeling it a form of market manipulation, and has tools in place to track and investigate breaches.
Aiming to prevent unnecessary fees stemming from unintentional self-trades, Binance, a major cryptocurrency exchange, is expanding its safeguards. The exchange plans to make its self-transaction prevention (STP) feature available to all spot and margin trading users from October 26, as per a blog post published on October 11. After the STP is in place, the "expire maker" STP mode will be the default setting for every transaction pair and order on Binance's spot and margin trading platforms. Users will be able to identify those orders which have been discontinued as a result of the STP function via the transaction history page on Binance's official website, Binance App, and Binance Desktop App. First introduced in January 2023, the STP feature is designed to halt the completion of transactions that could potentially result in a self-trade. This feature mainly targets API traders who configure distinct programs to automatically execute trades on an exchange's trading engine. Self-trading involves an API user or a group of connected users trading with themselves, regardless of their intent. The STP feature helps API traders avoid inadvertent self-trading transactions and associated superfluous fees. According to Binance, the lack of an STP tool could lead to unintended self-trading in a competitive market scenario, for example, separate trading units from the same institution, each using a unique UID and independent trading strategies, might post orders that end up trading with each other. Even though the STP handles accidental self-trading transactions, the exchange strictly prohibits intentional self-trading. Binance pointed out that self-trading to feign market activity could potentially be seen as a form of market manipulation, adding, “Our market surveillance team actively watches for signs of intentional self-trading and other market manipulation tactics. Binance is equipped with an extensive suite of tools to trace intentional self-trading and bring the wrongdoers to task.” It's worth noting that Binance incorporated the STP feature for API-based USD-margined futures in August 2023, and it is an optional feature that only comes into play when users activate it.
Published At
10/11/2023 8:54:11 AM
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