Cryptocurrency exchange Binance has introduced self-trade prevention (STP) to block the execution of an order if it would result in a self-trade. Following the integration planned for 26 October 2023, the ‘expire maker’ STP mode will be the default mode for all trading pairs and orders on Binance’s spot and margin trading platforms.

Once the STP feature is live, users will be able to check what orders have expired due to the STP function on the Binance official website, Binance App, and Binance Desktop App through the transaction history page. The function targets application programming interface (API) traders, who set up specific programs to execute trades automatically with an exchange’s trading engine. What is a self-trade? Self-trading occurs when an API user or a group of related users trade with themselves, intentionally or unintentionally.

The STP enables API traders to avoid accidental self-trading transactions, helping users prevent unnecessary fees associated with such transactions. Officials from Binance said that without STP, unintentional self-trading could happen in a competitive marketplace. For example, when orders from separate trading units of the same firm, using the same unique UID, with unrelated trading strategies, happen to post orders that trade with each other.

Vigilance against intentional self-trades and market manipulation While unintentional self-trading transactions are handled through the STP, intentional self-trades are prohibited on the exchange. When self-trading is done intentionally to create an illusion of trading activity, it can be considered a form of market manipulation, as per Binance. Their market surveillance team actively monitors market activity to identify intentional self-trading and any other forms of market manipulation.

The exchange has extensive tools to track intentional self-trading and investigate offenders. As previously mentioned, Binance integrated the STP feature for USD-margined futures on API in August 2023. The STP function is optional and only takes effect when users enable it, the company noted.

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