The leading cryptocurrency exchange, Binance, has achieved much over the past several years, and especially in 2019 and 2020. However, the service may be developing too fast, which likely makes it difficult to make sure that everything works as perfectly as it could.
As a result, it is not uncommon for errors to happen, and the ones that always end up suffering are its customers. When this happens, the exchange doesn't seem to be all that interested in helping the customers. Instead, it seems to be making moves to cover up the flaws while paying users a ridiculously low amount to try and satisfy them, not even coming close to matching their actual loss.
Binance’s Schemes Revealed
Recently, a new threat emerged on the r/CryptoCurrency subreddit, revealing cases that revolve around this very issue.
The thread was started by a user called u/Wellington20222, and its name is "Binance is forcing thousands of people to sign NDA’s and are giving less than 5% as a reimbursement."
The user makes a point that they did not sign anything at the time of writing the post. However, they are familiar with the issue as they know someone who did sign the NDA (Non-Disclosure Agreement).
This unnamed Binance user suffered a great loss due to an issue that affected the app. Not only that, but Binance itself publicly acknowledged that the issue exists.
However, when the affected user complained about a $10,000-large loss, the exchange went on ignoring him for months. According to u/Wellington20222, the affected user sent ticket after ticket, and the exchange did nothing to help them, despite the fact that the loss was caused by a technical issue, not the user's personal error made during trading.
After being in 'limbo,' as u/Wellington20222 calls it, for multiple months, the exchange finally responded by offering compensation in 400 USDT. The cryptocurrency USDT is, as many likely known, a stablecoin Tether, whose price is pegged to the US dollar.
As such, it is always equal to $1, meaning that Binance offered less than 5% in compensation for a $10k loss. Not only that, but it forced the user to sign an NDA in order to cover up the issue. It also noted that the user is not allowed to show the NDA to their lawyer, "which is just ridiculous," u/Wellington20222 concludes.
u/Wellington20222 also noted that they are experiencing a similar problem themselves, losing $12k and being offered and NDA and $350 in USDT in compensation.
Is Binance Abandoning the Core Values of the Crypto Industry?
Clearly, Binance is starting to move away from the crypto enthusiasts' dream of being a truly user-oriented service. Instead, it is creating some sort of a bureaucratic, only-for-profit infrastructure that doesn't seem to mind profiting by damaging others.
Clearly, this is far from what these types of services are supposed to be, and many are blaming the overly-centralized structure of the exchange. Crypto users would much rather have truly decentralized organizations.
To show how decentralization should work just take an example of a betting platform, AlphaPlay. This platform has a much better approach to the issue, which revolves around collective ownership. As such, it completely eliminates the risk of human factor influence. This is possible due to its reliance on smart contracts. Even the developers and organizers cannot change the conditions of the smart contracts that are already launched. They are truly immutable and transparent, so the user is guaranteed to get fair earnings on their bets.
The platform also has its native token, which is based on Ethereum's ERC-20 model. The token is currently in the middle of its token sale that will last until August 8 of this year. All token owners are receiving 6% of the platform's turnover as a bonus. Additionally, users are creating their own client base of active players. By doing so, they are earning up to 4% of the platform’s turnover. Lastly, token owners are also wining up to 90% of the turnover as prizes.
But, instead of offering anything like this, Binance is becoming more and more self-centered, using the users, instead of serving them. It could be that the exchange grew too fast, and received too much power and influence too quickly. As such, it lost interest in helping, and started focusing on accumulating more power.
In a way, it is sad to see what is happening to the leading exchange, and if it marks the fall of Binance, the company will only have itself to blame.