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Regulators Note Bragging Cryptocurrency Derivatives Traders

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Bragging cryptocurrency derivatives traders might have worsened things for themselves and trading platforms. Regulators and politicians now have yet another incentive to crack down on the crypto market.

Inca Digital, a US-based cryptocurrency intelligence firm that works in partnership with the US Commodity Futures Trading Commission confirmed that cryptocurrency derivatives traders in the US and many other nations could access various restricted platforms despite restrictions.

In a report by the firm today, most users living in the USA, UK, and Turkey show other locations in their bio. They also found tweets that reveal profit and loss (PNL) evidence, with a screenshot displaying a derivatives trade execution, referral link, and more tweets mentioning trader’s unique identifier and support requests. These PNL proofs and screenshots are meant for bragging and showing a derivatives trader’s winning trades.

The team had a sample of 2,939 unique Twitter accounts involved in derivatives trading on Binance, OKEx, Huobi Futures, Bitfinex, Bybit, FTX, and BitMEX. They identified locations of 2,164 traders globally, with 372 residing in the United States.

Inca Digital’s Investigation Team used a number of Natural Language Processing (NLP) methods that produce consistent datasets based on the digital footprints of cryptocurrency users. They take derivatives traders on major derivatives platforms and try to prove that their geographic locations are more varied than what the exchanges claim and are permitted by local securities agencies.

Three methods used to gather the data include speech sample collection and advanced multi-language Geographical Named Entity Recognition. By running tweets of the identified users through the model, the technology geo-tagged 2,079 of the 2,939 derivative traders. According to the report, the geo-tags can be combined to predict the actual locations of the derivatives traders. This is regardless of the statements made during the KYC onboarding processes.

Using this method, the top spot goes to the US, Turkey, Indonesia, India, and the UK.

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