CZ Encourages Platforms On Implementing ‘Responsible-Trading’ Features
CZ Encourages Platforms On Implementing ‘Responsible-Trading’ Features
June 19, 2020
CZ Encourages Platforms On Implementing ‘Responsible-Trading’ Features
CZ Encourages Platforms On Implementing ‘Responsible-Trading’ Features
June 19, 2020

Changpeng Zhao, popularly known as CZ, CEO of leading cryptocurrency exchange Binance, encourages platforms on implementing Responsible-Trading features after a 20-year-old Robinhood trader commits suicide.

Alexander Kearns, a student at the University of Nebraska took his life upon seeing a $730,000 negative balance on the popular stock trading app Robinhood.

Kearns took up stock investing during the pandemic. Robinhood offers a commission-free trading, a fun and easy-to-use mobile app and even awards new customers free shares of stock. Robinhood Markets, Inc. is a U.S.-based financial services company headquartered in Menlo Park, California. The company offers a mobile app and website that offers people the ability to invest in stocks, ETFs, and options through Robinhood Financial and crypto trading through Robinhood Crypto.

Commission-free trading and zero-minimum balances attract younger customers, many of whom have little understanding of the securities and markets they are dabbling in. 

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As the Covid-19 stock market swung wildly, Kearns begun experimenting, trading options. Kearns left behind a screenshot of his Robinhood account in his suicide note, showing a negative amount of $730,165.72.

However, in reality, he had over $16,000 earned.

Forbes report pointed out that the negative balance “may not have represented uncollateralized indebtedness at all.” 

Kearns may not have realized that his negative cash balance that was displayed on his Robinhood home screen was only temporary and would be corrected once the underlying stock was credited to his account.

Changpeng Zhao, CEO of Binance, took to twitter on the importance of trading platforms warning people on responsible trading. He emphasized on putting up an anti-addiction notice, Binance being of the first crypto exchanges to do so:

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He referred to an official blog post on how Binance takes responsible trading seriously, through its various services, one of the features being ‘Anti-Addiction Notice’.

Every exchange is responsible for educating its users, as much as it is for enabling user access to the products. In a sense, because exchanges can easily list new projects or tokens, it is more important for exchanges to ensure responsible trading principles are inculcated in its DNA.

– binance

The ‘Anti-Addiction Notice’ temporarily bans users due to consecutive losing trades. When a user experiences a losing streak or suffers a heavy loss, Binance continuously reminds them of the risk involved in trading and encourage them to hold back on trading activities.

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Source: Forbes | Binance | Image: Wikimedia Commons

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Jafrin Ahmed

Crypto newbie passionate about creating resourceful content on blockchain technology, cryptocurrencies and decentralized apps.