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Binance, the world’s largest exchange by trading volumes, recently launched zero-fee Bitcoin trading. However, this move has not been without issues, as the CEO of the exchange, Changpeng Zhao, raised questions about how this move promotes wash trading.
Binance users want zero-fee Bitcoin trading
The crypto market has been on a prolonged bear trend, and exchanges have adopted innovative ways to become more competitive. Binance announced an option allowing users to buy Bitcoin and sell it without worrying about the trading fees.
In a recent Twitter poll, Zhao asked his followers if they would want the exchange to continue offering zero-fee Bitcoin trading despite its risks. Around 65% of the voters responded with a strong yes.
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Zhao, who is very vocal on Twitter, is known for implementing new changes based on community feedback. Therefore, with most of the people who participated in the poll urging the CEO to preserve zero-fee Bitcoin trading, it is most likely that this feature will be preserved.
Binance CEO alerts on wash trading
There are benefits derived from adopting zero-fee Bitcoin trading for Binance, such as attracting new users and causing an increase in the trading volumes. However, issues such as wash trading could also arise. Wash trading happens when users make fictitious trades to get incentives, such as climbing up the VIP tiers on Binance.
Additionally, Zhao said that if the exchange wanted to promote zero-fee Bitcoin trading among all users, it needed to implement the necessary safeguards. These include having detection tools that will identify false trades. Another change Binance could make is removing zero-fee Bitcoin trades from the VIP tier program.
In a recent update, Binance announced that it would exclude 13 Bitcoin trading pairs from trading volume calculations, thereby removing these trades from qualifying for VIP tiers. According to the exchange, this change would create a fair trading environment for everyone.
This is one of the moves made by Binance to increase its global presence. The exchange giant recently expanded into Spain through its subsidiary, Moon Tech Spain. The subsidiary registered as a virtual asset service provider (VASP) with the Spain central bank.
Zhao noted that it complied with global regulations to boost the adoption of cryptocurrencies. He also said that Binance had invested in compliance and launched tools to help it to comply with anti-money laundering and anti-terrorism financing.
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