Cryptocurrency exchange Binanceintroduced a new functionality to help prevent API users from self-trading on their platform.
Binance Introduces A New Feature To Cryptocurrency Users To Prevent Involuntary Self-Trading
The service will be available to Binance’s API users from January 26. The website and application users of the exchange will not be affected.
The exchange added that this feature is optional and will not have any effect for users who choose not to use it.
The Self-Trade Prevention (STP) functionality will prevent the execution of orders for self-trading purposes, an activity where users trade with each other to create the illusion that there are more trades than they actually are.
Self-trading is therefore considered a form of market manipulation.
Binance API is the exchange’s service that allows third-party trading companies to connect to Exchange servers, access market data, and trade.
The STP functionality will provide users with the tools they need to avoid unintentional self-trading.
Other benefits include being able to execute trading strategies with a self-executing guarantee and saving fees from unnecessary transactions.
Self-trading happens when a user or a group of linked users trade among themselves. The same participant is involved on both sides of the transaction, so there is no actual change in the actual owner of the traded asset.
Therefore, intentionally self-trading is prohibited under Binance’s terms of use.
*Not investment advice.
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