Bad actors may always exist, but cryptocurrency leaders like Binance have a plan in place to prevent harmful attacks.
The sad reality is that a lot of fake news, scam messages and other fraudulent and defamatory materials are circulating the web, making it difficult for investors to know what information is legitimate and who they can trust. While trading can be fun and exciting, it can also lead to emotional or financial stress, especially when many dishonest parties manipulate the market.
Although bad people will always exist, traders can exercise caution by leveraging the principles of responsible trading. Responsible trading requires investors to execute control over their trades, knowing when they are in a suitable position to take on risks and taking accountability for their actions. By acting as a responsible trader, investors never take risky positions without research or invest funds they cannot afford to lose.
For this reason, Binance continues to focus on the ongoing development of their industry’s regulatory framework to help discourage bad actors from harming honest investors. Being a significant player in the cryptocurrency industry, Binance has also taken it upon itself to provide leadership to the market.
Over the past year, this has involved the development of ongoing partnerships with law enforcement and security firms to help improve cybersecurity measures across the broader cryptocurrency industry. The exchange has also continued to ramp up its in-house anti-money laundering (AML) detection and analytics capabilities and taken several additional actions to prove its commitment to responsible trading.
Although the topic might not be top of mind to some consumers, recent news would suggest these precautions are coming at a time more necessary than ever before. Binance continues to remain their resolve to bring to light these injustices and provide support however possible.
Why responsible trading matters
Some common examples of falsified information come down to bad actors pretending to be the exchange itself and sharing information that is untrue and can negatively impact a user’s account, such as using a fake link in an email to encourage users to provide their login information.
Other common concerns center around pump and dump schemes. Bad actors with a big holding in a given cryptocurrency will spread false information to drive up the price; as prices increase, they encourage other traders to “buy before it’s too late.” This becomes harmful when new investors go all in and invest their life savings away, only to have the asset crash before their eyes.
Of course, a final example is apparent with Fancycat, the international organization of cybercriminals responsible for over $500 million worth of ransomware crime. Many of these criminals often looked to cryptocurrency exchanges to safely funnel their earnings without being caught by the authorities.
Although very different examples, addressing these concerns comes down to one thing. Responsible trading.
A demonstration of commitment
To date, Binance has taken some additional steps to ensure responsible trading is maintained. Among them are:
Limiting new platform users (accounts opened in the last 60 days) to maximum leverage of 20x
Confirming plans to become a regulated financial institution, in addition to ensuring local licensing and compliance is maintained
Restricting access to derivatives products in the financial hub
Limiting new API key creation to verified accounts only to ensure safe and fair trading for market participants
Becoming the first and only cryptocurrency exchange to introduce a responsible trading program
Upon taking a closer look at the responsible trading program, three key focus areas are apparent. They are practicing self-discipline, continually educating themselves, and protecting traders’ assets. In practice, these procedures include:
Measures to limit impulsive trading actions, such as when a trader suffers a losing streak or loss, the platform will provide automated reminders of the risks involved in trading
Cooling-off features for users to temporarily disable derivative trading abilities if they would like additional support in exercising self-discipline
Price protection, a feature that prevents users from getting hurt by market manipulation by triggering stop-losses or take-profits when bad actors are manipulating the system
The team hopes that by sharing their learnings and any proactive measures they take, they can help steer their industry forward, now and long into the future.
Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you with all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor can this article be considered as investment advice.