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Our Commitment to Responsible Trading and Combating Distrust

2021-08-16

It has come to our attention that a very small number of individuals are discussing on social channels ways to create distrust and demand settlement offers from Binance. These include spreading fake news, scam messages, and even potentially fraudulent and defamatory materials, so we like to remind the community to stay alert and exercise care. Where required, we will take appropriate actions to protect our interests and reputation.

Whilst we do not publicly discuss individual case specifics, we remain happy to speak to any user with concerns, and users can always approach our customer support team for assistance. We firmly stress that our policy is fair in that we compensate users who experienced actual trading losses due to our system's issues. We do not cover hypothetical “what could have been” situations such as unrealized profits. 

Binance serves to match traders between users and is not a counterparty to the trades. Despite this, we maintain one of the most robust Insurance Funds as an added measure to protect our users. During volatile conditions, extreme market movements can seriously impact open positions instantaneously. Our insurance fund covers bankrupted positions to absorb their negative balances. This mechanism helps prevent counterparty liquidation and does not exist in traditional exchanges.

As a market leader, we understand that we attract all sorts of publicity, and it is our principle that we do not yield to unreasonable demands exactly because we take our leadership role seriously. Ceding to extortive demands will enable widespread abuse against all exchanges and harm the foundation for our ecosystem’s sustainability. 

The ongoing development of our industry’s regulatory framework presents an opportunity for greater collaboration between all participants, and will bring about more market standards that discourage bad actors. Binance as a major exchange, enjoys the trust of the community, which means we also must lead the market in user protection and best practices. Binance is the first and so far only crypto exchange to have introduced a Responsible Trading Program.

We take customer feedback and regulatory requirements seriously, and we constantly improve our platform technology and product offerings to provide the best user experience. In the last 30 days, we have delivered on the following:

  • On July 16th, Binance became the first exchange to limit new users to a maximum leverage of 20x. Over a week later, we announced the limit would be extended to all new accounts opened within the past 60 days, and we applied the rule retroactively as an added protection measure.

  • During a virtual media conference, our founder and CEO “CZ” affirmed Binance’s plans to become a regulated financial institution. Amongst other things such as ensuring local licensing and compliance, this would also entail the establishment of regional headquarters to deepen communication with regulators, and we continue to ramp up recruitment of our compliance department.

  • On July 30th, we announced that we are planning to wind down our derivatives products offerings in Germany, Italy, and the Netherlands. This was followed by our decision on August 6th to restrict Hong Kong users as well, making Binance the first major crypto exchange to proactively restrict access to derivatives products in the financial hub. 

  • Today the latest update to our API service will come into effect, limiting new API key creation to verified accounts. This is to ensure a safe and fair trading environment for all market participants and to remain compliant with the latest industry requirements.

We hope by sharing our learnings and the proactive measures we take, we help steer our young industry forward and for the long-term. 

Warning: scammers impersonate Binance staff in many ways, including sending out emails pretending to communicate on compensation cases.

Always remain cautious. If you receive communication from someone you believe to be a scammer, please message Binance customer support.