Binance announced a few days ago that they eliminated trading fees for some Bitcoin trading pairs. This was something that the whole crypto community celebrated as it allowed investors to get access to Bitcoin without paying trading fees. To be precise, there were 13 spot trading pairs that were affected: BTC/AUD, BTC/BIDR, BTC/BRL, BTC/BUSD, BTC/EUR, BTC/GBP, BTC/RUB, BTC/TRY, BTC/TUSD, BTC/UAH, BTC/USDC, BTC/USDP and BTC/USDT.
This is now increasing the requests from analysts to exclude Binance (or at least these trading pairs) from volume calculators. But what’s the reason behind the request? That there is washing trading taking place, which has an impact on the information that traders get about real trading volumes.
Binance Introduces Zero-Free Trading for BTC Spot Trading Pairs
As mentioned before, Binance introduced a zero-free trading scheme on July 8, 2022. The zero-fee scheme involved 13 different trading pairs linked to Bitcoin, fiat currencies and stablecoins.
This situation pushed trading volumes higher. This is something that happens very commonly when there are no trading fees. That means that investors that conduct scalping become more efficient (they can profit with very small price changes by placing hundreds of trades per minute), and it also means that there could be wash trading.
Wash trading allows investors to place a sell and a buying order (or vice versa) that gets filled immediately. If a trader places a buy order it automatically completes it with a sell order, which gives misleading information to market participants.
Indeed, this practice is illegal in the United States. Wash trading could artificially increase trading volumes. And this is what indeed happened. The current volume represented by these 13 trading pairs is not real, as it includes trades that should not be included in the calculations.
Experts Complain About Wash Trading
The recognized investor Alex Krüger wrote on Twitter that there have been “extraordinary wash trading volumes in Binance.” Trading volumes spiked as much as 18x when the announcement was made and people started trading without fees. On Twitter, he has also explained that these volumes make charting on Binance useless.
About it, Alex Krüger said:
Extraordinary wash trading volumes in Binance since 10AM EST, when @binance eliminated fees on spot trading for BTCUSDT and other pairs.
Volume is now 6x larger than usual (18x earlier today).
This makes charting Binance’s spot useless. Hope they can get this taken care of.
Changpeng Zhao, the CEO of Binance answered that Binance excluded these 13 Bitcoin spot pairs from volume calculations. At the same time, VIP tiering adjustments were expected to come soon as well. Several users and investors were placing buy and sell orders in order to increase their trading volumes and get a higher trading tier.
Despite the efforts shown by Changpeng Zhao and the Binance community, Alex Krüger said that Binance spot trading pairs still show fake volumes that are 5x larger than normal volumes. He continued to ask for Binance to be excluded from volume calculation.
It would be a matter of time before we see these trading pairs having fees once again. This could solve the issue that trader Alex Krüger has described on Twitter. According to Binance’s official announcement, free trading will last until “further notice.”
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