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Binance Takes Measures To Stop Insider Trading By Employees

Mar 19 2018

Binance

Wall Street might have an ambivalent opinion of cryptocurrency, however people who trade in cryptos are taking inspiration from history.

Binance, the biggest crypto exchange in the world by trade volume, has introduced employee trading restrictions that its' boss says he copied from large investment banks.

"We permit our staff to own cryptos, because we think they will have a higher value than fiat currency in future" said Changpeng Zhao, Binance CEO, in a Yahoo Finance interview. "However, everyone has to be cleared if they wish to trade cryptocurrencies, and they must wait a minimum of thirty days before making any further trades". According to Zhao, these trading restrictions help staff earn more cash, because it requires them to hold for longer, even when volatility is high in the short term. "I never liked day trading" he said.

This Binance policy has been in force since September 2017, as a safeguard to prevent any scope for insider trading. Having access to knowledge about market actions, such as new coin listings, cryptocurrency exchange staff can gain an unfair advantage in trading --- particularly now that many exchanges have started to launch tokens themselves.

For instance, Binance issued BNB (Binance Coin), which offers users a fifty percent price reduction on transaction charges, when they trade with Binance Coins. Binance Coin prices have increased 2700 percent in the few months since it launched. Following the announcement last week of Binance setting up a decentralized exchange, the price of the token increased another twenty-five percent.

Binance / BNB - How to use an exchange tutorial

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