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Binance, currently the largest exchange in terms of volume, has announced the launch of its highly anticipated new feature. Crypto exchanges have been trying to expand their user base with copy trading services for a long time. Binance has now introduced this service to maintain and increase its user count in the challenging environment of bear markets. Exchanges are taking such steps due to declining volumes.
Binance Copy Trading
Coinbase, a global exchange, opened up to the world and launched futures trading. Following suit, many exchanges have taken action to expand their customer base with new products. Binance has now launched its copy trading service to increase its volume and user count. Binance will offer this service for futures trading products in specific markets.
This service was already being offered by other exchanges. Investors who want to copy traders’ transactions can mimic their trades by making various settings using this feature. Although this can be profitable at times, it is quite risky. Especially in futures trading, the risk taken by the copied trader is also taken by thousands of users. Investors can suffer significant losses in case of a potential wrong move.
Binance Copy Trading Starts
Investors will be able to follow a maximum of 10 traders simultaneously. Binance emphasized the potential of the copy trading feature to increase participation within the trading community in its announcement. A spokesperson for the exchange said:
“We are reducing barriers to entry into crypto with copy trading and helping to increase social participation within the community. Binance constantly evaluates its product offerings as regulations and regulatory guidelines develop. Therefore, the availability of specific products may vary in different regions. We will continue to review our product offerings to ensure that copy trading is well received by both users and regulators.”
Meanwhile, futures trading is prohibited in many regions. Binance was sued by the CFTC for offering futures trading services to US customers earlier this year. Additionally, Binance has faced regulatory issues in various countries such as Canada and the Netherlands.
Binance is currently involved in 2 lawsuits against the CFTC and SEC in the US. There are also allegations that the US Department of Justice is conducting a pre-lawsuit investigation.
