As a result, CEO Changpeng Zhao said the exchange will make some changes “shortly” to “remove all incentives to wash trade.”
Binance trading volume spiked after its global zero trading fee policy went live Friday morning.
Zero trading fees worldwide for 13 crypto pairs at Binance – the world’s largest crypto exchange by volume – began Friday at 14:00 UTC (10 a.m. ET). The move caused an explosion in trading at the exchange, with bitcoin/tether (USDT) spot volume surging to 320,000 coins within hours. The exchange hasn’t seen volume that high for even a full day since March 2020.
Binance CEO Changpeng Zhao attributed the surge to people trying to gain VIP tiers via high trading volumes. “We will exclude BTC trading from VIP calculations,” he tweeted. “Remove all incentives to wash trade. Announcement with details coming shortly.” A wash trade occurs when an investor buys and sells an asset for the purpose of artificially inflating the price.
The exchange made the zero-fee announcement on Wednesday, with the plan becoming effective Friday on Binance’s fifth anniversary.
“With the onset of the crypto bear market, exchanges like Binance have been seeking ways of attracting and retaining users on their platforms to ensure their slice of the depleted pie remains healthy,” CoinDesk reported at the time.
This article was originally published on coindesk.com