Binance to avoid major brokerage gap
Binance is closing a loophole in the link program that allows some major brokers to take advantage of the multi-level payment structure offered by Binance.
According to a Bloomberg report, the system's top-tier broker partners, which have a total of nine tiers, aggregate and sometimes trade multiple accounts together to reduce trade fees that can be passed on to arbitrage or clients of those platforms. on behalf of them.
This has allowed some platforms to earn extra revenue by pocketing the difference between their special premium pricing and whatever they charge their customers.
Platforms that participate in the Link program can attract customers by passing savings on to prospective customers and offering attractive trade-in fees not available in the retail market.
The wide eclipse on Binance
Although this arbitrage scheme employed by some clients of the Link Program is specific to institutional clients, the exchange demonstrates extensive attempts to prevent abuse of the platform.
Related: Binance to appeal $4.4M fine from Canadian regulator
On June 26, Binance updated platform users by encouraging them to report suspicious activity, such as payment arbitrage or detection of your client's violations with institutional accounts. As an incentive, users are rewarded for reporting proven policy violations and bad actors.
The woes of control
Binance continues to emphasize its commitment to compliance in light of regulatory challenges in the region.
Former CEO Changpeng Zhao entered into a $4.3-billion settlement with the United States Department of Justice in November 2023 for violating the Bank Secrecy Act and provisions related to the country's anti-money laundering regulations.
Although Binance.US is a separate company from Binance, it also faces regulatory headwinds from US lawmakers. In June, North Dakota authorities revoked Binance.US' money transfer license, preventing the exchange from operating in the state.
In addition, Binance agreed to leave Nigeria earlier this year after accusations of tax evasion and money laundering from the Nigerian government, which also caused Binance to become scarce in the local Nigerian currency.
Recently, the exchange was fined $2.25 million by India's Financial Intelligence Unit (FIU) for allegedly violating anti-money laundering regulations in the country.
Journal: Unstable Coins: Debasement, Bankruptcy and Other Risks Looming.
