The CEO of Factor LLC and internet famous veteran crypto trader, Peter Brandt recently took to Twitter to express his discontent with Binance and its CEO. Brandt replied to Binance CEO, Changpeng Zhao’s tweet accusing him of ‘abusing’ his customers.
Given how you abuse your customers it is surprising you sleep at all
— Peter Brandt (@PeterLBrandt) November 22, 2021
After receiving mixed comments on his tweet, Brandt noted that his problem with Crypto exchanges in general, including Binance, is that these platforms in fact deal “against customer orders”. Given the extreme leverages allowed by the futures market, traders bet against the odds, hoping to get higher returns taking high risk, by leveraging 10x 100x on trades, i.e., borrowing from the exchange. However, if the trader’s bet gets through in the highly volatile market, then the exchange will bear the losses. So, to tackle this problem, crypto exchanges have been accused of allegedly freezing the platform during hikes.
“my gripe vs. crypto exchanges goes far deeper than bad fills – it deals with trading against customer orders way outside daily range and not reporting the price discovery. We’d have been jailed”, Peter Brandt tweeted.
The Binance Freeze Fiasco in May
Earlier this year, CoinGape reported on one of many cases where the exchange had frozen during the hike, causing billions in losses to its users. While several exchanges are blamed for adhering to this unethical tactic, yet, Binance was reportedly caught in the act and was served with a lawsuit.
Mid-May when cryptocurrencies suddenly started to plunge one after another, Binance froze, stranding its users in the middle of a crypto apocalypse. World’s largest cryptocurrency exchange froze for over an hour, costing hundreds and thousands of traders their fortune. As retaliation, over 700 traders filed a lawsuit together against Binance. While the exchange denied claims of intentionally freezing the platform, investors like Anand Singhal, whose story was broadly covered across media platforms, lost all his life’s savings because of the incident, leaving him with nothing. Anand told the Wall Street Journal, “Binance has traumatized me, I’ll never trade again”.