Binance, a major cryptocurrency exchange of the world, issued a statement on 1 April on a huge decline in Act Token Worth. Binance VIP users were a major contributor to this decline, who sold a huge amount of act token in a short time. The incident caused a sharp decline in the price of Act Token and also affected the price of many other low-market-cap tokens. After this incident, this token got into trend and users were excited to know about it. Binance made it clear that in this situation no one account made huge profit, but he has talked about monitoring the market position and taking proper steps.
Binance analysis and role of VIP customers
Binance said in its statement that 3 VIP customers sold a total of 514,000 USDT Worth Act Token in Binance Spot Marketplace within a brief period. At the same time, a non-VIP customers also transferred a large amount of act token to their account and sold around 540,000 USDT prices to the act token. The amount of this massive token sold on the act of the act and some futures caused the liquidation of the positions.
Due to this sale, the price of many other low-market-cap tokens also declined, causing an atmosphere of nervousness in the entire crypto market. Binance Also said that no one account made much profit in this incident. Binance says that the act token is completely circulating and as long as these token are traded in the secondary market, the exchange is not the right to stop these tocons from selling these tocons.
Steps and risk management taken by binance
Binance said that after this incident they reduced the leverage level on Act/USDT Permanent contract. Binance also said that during this change, no market was seen and no user’s position was forced. Binance ensured that to avoid such incidents they always make adjustments in the leverage level based on market status, such as liquidity and trading volumes.
In addition, Binance also reminded its users that they should manage proper risk when trading digital assets, as market conditions may change very quickly. Binance has also given incentives to encourage its market makers, so that they can help bring liquidity to the platform and reduce such risk.
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Conclusion
The decline in the price of Act Token of Binance made it clear that the large trading volumes and transactions in the crypto marketer could cause instability in prices. Binance has decided to improve its leverage and risk management measures, analyzing the incident. However, this incident also shows that the rapid events in the crypto market may have an impact on the entire market. Investors should evaluate risks properly when trading and make a prudent decision to avoid any sudden change.
