- Binance is closing a loophole in its Link Plus program that provided prime brokerages extra revenues at Binance’s expense.
- The prime brokerages took advantage of Binance’s nine-tiered fee structure to earn additional revenue.
- While Binance realigns the fee structure on July 1, major companies like Bequant are impacted by the move.
Binance is revising its Link Plus program to prevent prime brokerages from taking advantage of a fee structure that allowed them to generate excessive profits.
The move comes after Binance discovered the program, designed to help brokerages manage institutional client accounts, was being misused to generate additional revenue at the exchange’s expense.
Link Plus is an interface that allows prime brokerages to manage institutional customer accounts. After Binance discovered the misuse allowing third parties to earn revenue at Binance’s expense, exchange decided to realign its fee structure, effective July 1st.
Reportedly, Binance’s top “VIP 9” tier offers users with at least $4 billion in monthly trade volume lower fees than regular customers. Prime brokers, often falling under this category by aggregating multiple client accounts, were able to trade at discounted rates while charging higher fees to their clients.
A Binance spokesperson emphasized the company’s commitment to compliance and outlined plans for fee restructuring to prevent further unfair advantages. The spokesperson acknowledged the potential impact of these changes, stating, “Binance understands that these changes may affect some intermediaries, but our priority remains with our users and our commitment to upholding compliance and a level playing field.” They added:
“Since last year we have notified companies on the Link Program that we will implement enhanced compliance standards and changes to align our fee structure for Link end-users to ensure transparency and fairness.”
Many Binance VIP customers have voiced concerns about prime brokers’ misuse of the Link Plus program. While Binance has proposed changes to address the issues, some companies have already felt the impact. Bequant, a Malta-based crypto trading service, announced its intention to shift focus to its core trading business, as its primary model relied on Binance’s multi-tiered fee structure.
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