Cryptocurrency exchange powerhouse Binance is set to introduce a self-trade prevention (STP) mechanism designed to block the execution of orders that could potentially result in self-trades.
Commencing on October 26, 2023, the default mode for all trading pairs and orders on Binance’s spot and margin trading platforms will be the ‘expire maker’ STP mode, following its integration.
Once this STP feature goes live, users will have the ability to review expired orders due to the STP function via the Binance official website, Binance App, and Binance Desktop App, accessible through the transaction history page. This feature primarily addresses application programming interface (API) traders who rely on specific programs to execute trades automatically using the exchange’s trading engine.
But what exactly is a self-trade? A self-trade transpires when an API user or a group of interrelated users intentionally or unintentionally execute trades amongst themselves. The STP empowers API traders to steer clear of inadvertent self-trading transactions, thus aiding users in avoiding the unnecessary fees often associated with such actions.
Binance officials emphasized that in a competitive marketplace, unintentional self-trades could transpire. For instance, scenarios may arise where orders from separate trading units within the same entity, using the same unique UID but employing unrelated trading strategies, find themselves posting orders that inadvertently trade with each other.
In the ongoing battle against market manipulation, it is crucial to differentiate between unintentional self-trades and those executed with intent. Binance enforces a stringent policy against deliberate self-trades, especially when they are carried out to artificially inflate trading activity, which qualifies as a type of market manipulation. The exchange upholds a robust market surveillance team that diligently monitors market movements to detect instances of deliberate self-trading and other forms of market manipulation. This team is equipped with a comprehensive set of tools to trace and conduct investigations on those involved in such activities.
It’s worth noting that Binance had previously integrated the STP feature for USD-margined futures on API back in August 2023. Importantly, the STP function is optional and only takes effect when users specifically enable it, as outlined by the company.