In a bid to safeguard funds and prevent instances of fraud or theft by unscrupulous actors, Binance peer-to-peer, (P2P) has expanded its risk management roadmap to protect users.
A peer-to-peer (P2P) service is a decentralised platform whereby two individuals interact directly with each other, without a third-party intermediary.
With recent advances in P2P marketplaces, crypto exchanges like Binance consistently aim to accelerate the P2P experience by implementing and improving strategies to ensure the ease and security of trading on their platform.
One of such strategies is the P2P escrow which guarantees both buyers and sellers are protected from falling victims to fraud or theft.
In a statement by Binance, it explained that the escrow does this in two ways – it helps buyers open an appeal if the counterparty defaults in releasing the cryptocurrency after payment; while on the other hand, sellers are also protected by holding the crypto in a temporary deposit within the escrow service until after payment from the counterparty has been verified.
The cryptocurrency is only returned to the seller if the payment is not verified within a specified timeframe.
According to Binance, in the first half of 2021, it took additional steps to double its efforts in ensuring a safe and optimal trading environment because of the rapid growth of its users.
Read also: Central Bank imposes huge fines on Nigerian banks for crypto violations
Initially, P2P trading on the Binance exchange was only limited to verified merchants, but to ensure inclusivity and make good its commitment to providing freedom in trading for all its users, Binance states that it opened up the platform to all users, but with meticulous rules and guidelines to protect and prevent people from losing their funds.
Recently, the platform has also expanded and implemented newer features and rules to further boost user protection.
Binance listed a few of the many standout measures it has undertaken to provide a safer environment.
“P2P Trading Requirements: By adding new trading requirements, users will have to complete robust identity verification steps such as specifying the quantity of completed P2P orders, SMS authentication processes, and the number of unique trading counterparties. This way, fraudulent and unreliable offerings or advertisements can be mitigated.
“Order-Matching Upgrade: According to the definition by Investopedia, Order-matching is a process where exchanges such as Binance pair one or more unsolicited buy orders to one or more sell orders to make trades. By improving the matching algorithm, the Binance team can ensure that its users can trade with trusted traders and verified merchants,” the platform explained.
Another measure highlighted by Binance is the risk management optimization which has actively facilitated the monitoring of suspicious activities on the Binance P2P platform, thereby limiting the trading activities of potential bad actors.
In addition, the platform introduced user education initiatives that give users the opportunity to safeguard their investments. Based on this, Binance has provided access to an extensive resource on P2P best practices hosted P2P webinars across the globe, and equipped customers with security tips for trading on its platform.
With access to this information, users can be guarded against potential theft and encouraged to trade cautiously.
According to the platform, while there is no risk-proof investment strategy, investors and P2P traders can trade more freely with the measures that Binance has put in place to ensure the safety of users in its marketplace. These measures remain a clear indication of the brand’s mission to protect its users’ funds and deliver quality service while propelling innovation and growth in the crypto space.
Peer-to-Peer trading, also known as P2P, has always been the cornerstone of the cryptocurrency landscape. Much like the barter system that predated fiat currencies, P2P transactions allow traders to directly exchange crypto with one another without involving a third party or intermediary.
P2P trading has grown in popularity and adoption as a result of some of its features for both casual and professional users, such as the ability to chat with one’s trading counterparty before completing a transaction, or the potentiality of traders personalizing their offerings based on their preferred price, payment methods, and local currency.
It also offers benefits such as – zero trading fees and flexible payment methods.
