Binance, the world’s largest cryptocurrency exchange by trading volume, has announced that it will extend its self-trade prevention (STP) function to all users of its spot and margin trading platforms.
The Self-Trade Prevention (STP) feature is engineered to halt the progression of a transaction if it would culminate in a self-trade. A self-trade transpires when an individual or a cluster of associated individuals engage in trading activities with themselves, whether deliberately or inadvertently.
Binance’s New Feature is a Long-Awaited One
This feature is primarily aimed at traders utilizing Application Programming Interfaces (APIs), who have established distinct programs for the automatic execution of trades in conjunction with an exchange’s trading mechanism.
As per Binance, inadvertent self-trading could transpire in a dynamic marketplace. This scenario arises when distinct trading entities belonging to the same organization, operating under the same unique User Identification (UID), and implementing unrelated trading strategies, coincidentally place orders that end up trading with each other.
The Self-Trade Prevention (STP) feature empowers API traders to circumvent inadvertent self-trading activities, thereby assisting users in evading unnecessary charges linked with such transactions.
The exchange also warns that intentional self-trading is prohibited on the exchange, as it can be considered a form of market manipulation. The trading platform asserts that its market oversight team is actively engaged in scrutinizing market behavior to detect deliberate self-trading and any other instances of market manipulation.
Binance possesses a comprehensive suite of tools to identify intentional self-trading and to conduct investigations into the parties involved.
The STP function was first introduced for USD-margined futures on API in August 2023. This feature is discretionary and only becomes operational when users activate it. Starting from October 26, the Self-Trade Prevention (STP) mode will be the standard mode for all trading pairs and orders on Binance’s spot and margin trading platforms.
The exchange says that the STP function is part of its efforts to provide a fair and transparent trading environment for its users. The exchange also encourages users to check their transaction history page to see what orders have expired due to the STP function on the Binance official website, Binance App, and Binance Desktop App.