Binance Should Cease Offering Margin Trading on Illiquid Altcoins [Opinion]

[cheezcarls]

The recent price collapse of MATIC illustrates that Binance is playing with fire by offering margin trading for altcoins. These kinds of manipulated price collapses only hurt the industry and make it look like a joke to those on the sidelines.

In August, the cryptocurrency world experienced a wakeup call. On Poloniex, CLAMS collapsed by -80 percent in just 45 minutes and led to 1,800 BTC ($20M) in liquidations. The story was nothing short of remarkable. An obscure altcoin with a trading volume of around $10M at the time had cost an exchange $20M in damages.

It left many in the cryptocurrency industry scratching their heads. Why was Poloniex allowing margin trading on an altcoin like CLAMS to begin with?

Source link here