Binance Forces Derivative Upgrades: Users Face Financial Losses

Date:

Dear CryptoUpdate Readers,

We’re deeply dissatisfied with Binance’s recent announcement regarding upcoming changes to their derivatives products. These changes, effective from 26 June 2024, seem to be another attempt to take advantage of their users under the guise of providing a better trading experience.

Binance Futures Credits Trading Mode: An Excuse to Seize User Funds

Starting from 26 June 2024, Binance will require users to upgrade to the Binance Futures Credits Trading Mode to continue accessing UM Futures. This mode will allow users to deposit non-stablecoin assets like BTC, ETH, and BNB as collateral for their UM Futures positions. Stablecoins are not accepted, and the credits are only usable in Cross Margin mode, limiting user strategy flexibility.

Binance Futures Credits enables users to convert their deposited assets into credits equivalent to USD value, which can be used for trading. However, this new system restricts isolated margin trading, forcing users to adapt their strategies. While Binance claims this upgrade will enhance trading experiences, it primarily serves to control user funds more tightly.

Forced Position Closures and Financial Losses

The current UM Futures mode will enter reduce-only mode from 26 June 2024. Users who cannot or choose not to upgrade to Binance Futures Credits will face severe consequences. They will be unable to open new UM Futures positions or increase existing ones. Furthermore, any open orders will be canceled. Users can still deposit collateral to avoid margin calls and liquidation, but they must close any existing positions by 30 September 2024. Any positions remaining after this date will be forcibly closed by Binance, causing potential financial losses.

This move will inevitably cause financial losses, as seen previously with our WAVESUSDT position. Held for two years with a $12,000 value, Binance’s sudden delisting led to a 30% price drop, resulting in forced liquidation and significant losses for many. This isn’t the first time Binance has used such tactics. Instead of transitioning existing positions to the new credits system, they force users to close positions, effectively seizing their funds. This method is akin to forced liquidation and constitutes fraud and a criminal act against their customers.

In our case, CryptoUpdate.io has two active positions, one of which we’ve maintained for over two years. We’ve diligently added to it and maintained the balance, waiting for the right moment to profit. Now, Binance is forcing us to choose between closing our position at a loss or having it automatically closed by them. This approach is not only unfair but also harmful to users who have invested time and money into their positions.

Due to these changes, we are projected to lose approximately $16,000. We had planned to hold our positions for another 2-3 years, but with the forced closure date of 30 September 2024, we have no other choice. Binance’s actions are coercive and detrimental to long-term investors.

Impact on Other Derivative Products

The changes affect a wide range of Binance’s derivative products, imposing restrictions and forcing closures across the board:

COIN-M Futures: Starting from 26 June 2024, users cannot open new COIN-M Futures positions or increase existing ones. All open orders will be canceled. Users will still be able to top up their margin balances to prevent margin calls and liquidation. All positions must be closed by 30 September 2024. Any positions remaining after this date will be progressively closed by Binance.

Options: From 26 June 2024, users will not be able to increase their Options positions or open new ones, and all open orders will be canceled. Users can either close their existing Options positions or hold them until they expire.

Portfolio Margin: Portfolio Margin accounts will enter reduce-only mode starting from 26 June 2024. All open orders will be canceled, and users will be restricted from transferring stablecoins into their Portfolio Margin Wallets. They must close their Futures positions by 30 September 2024, after which any remaining positions will be progressively closed.

Strategy Bots: Futures Grid, Futures TWAP, Futures VP, Funding Rate Arbitrage

Futures Grid: The Futures Grid strategy will expire on 26 June 2024, and any assets will be returned to users’ UM & CM Futures wallets.

Futures TWAP and Futures VP Trading Bots: Open orders using these bots will be canceled starting from 26 June 2024. Users must upgrade to the new Binance Futures Credits mode to continue using these trading bots.

Funding Rate Arbitrage Bot: From 26 June 2024, users will not be able to add or open new funding rate arbitrage positions. All open orders will be canceled, but existing arbitrage positions can be held until 30 September 2024. Any remaining positions after this date will be progressively closed, with funds returned to users’ spot wallets.

Futures Copy Trading

Copy Traders: Starting from 24 June 2024, users will no longer be able to copy new portfolios, and existing active copying portfolios will be closed on 26 June 2024. The margin balance will be transferred back to the users’ spot wallets.

Lead Traders: From 24 June 2024, users will no longer be able to participate as Lead Traders. Active lead trader portfolios will be closed on 26 June 2024, with the margin balance transferred back to the users’ spot wallets.

Futures NEXT: As of 26 June 2024, users will not be able to participate in Futures NEXT. Existing NEXT picks will be reverted to USDT and refunded to users’ Futures wallets.

Webhook Signal Trading: Starting from 26 June 2024, users will not be able to add or open new futures positions through Webhook Signal Trading. All open orders will be canceled. Existing positions can be held until 30 September 2024. Any remaining positions after this date will be progressively closed.

Our Stand Against Binance’s Unfair Practices

Binance claims these changes are for the benefit of their users, but the reality is far different. By forcing users into these new systems and closing positions, Binance is effectively manipulating the market and taking advantage of their customers. Instead of offering a fair transition, they impose draconian measures that only serve to enrich themselves at the expense of their users.

We urge our readers to reconsider their use of Binance Futures and to focus on spot trading. Binance’s greed and dishonesty have been laid bare, and it’s time for users to take a stand against such exploitative practices. We will also be filing a complaint with the European Financial Regulatory Authority to address these unfair practices.

For additional queries and information, please do not hesitate to contact Binance Customer Service agents.

Thank you for your continued support, CryptoUpdate Team

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