Binance has recently been in the news after launching a new digital currency decentralized exchange to the market. However, there are already some issues with its terms and conditions that are raising some concerns among users.
One of them is related to the fact that the exchange could eventually seize your digital currencies, which is something that centralized exchanges tend to do and that centralized platforms shouldn’t be able to do.
Binance DEX Generates Controversy
Binance, one of the most popular digital currency exchanges and platforms in the market has released its new decentralized exchange. In order to start using it, users do not need to provide a username, an email address or an ID verification. The exchange will just provide the user with a file that holds the private keys and a seed phrase.
At the moment, users can exchange BNB against MITH, the latest IEO held on the Binance Launchpad. Users only have to create an adderss on the Binance Chain, the blockchain network created by Binance and launched a few days ago.
According to Trustnodes, the DEXs’ terms and conditions show that the exchange could eventually confiscate digital tokens that were obtained by illegal methods.
About it, the terms and conditions read as follows:
“If Binance determines that you have engaged in any Prohibited Use via Site, Binance may address such Prohibited Use through an appropriate sanction, in its sole and absolute discretion. Such sanctio may include… proposal to Binance Chain governance for confiscation of any Digital Tokens obtaine in any Prohibited Use; and, terminating your access to any Services through the Site.”
At the same time, Binance is not the responsible for these actions, instead, only the validators and the community can take this decision. Moreover, Binance makes clear that they monitor suspicious transactions and report them to international regulators. The crypto exchange is also responsible for storing this data even after the user closes his account on the platform.
As Trustnodes explains, this platform that was expected to be a decentralized exchange ends up being centralized. Rather than being the interface of a smart contract, this is a Binance Chain node that interfaces with the network. These nodes can deny access to information, lie or even ban users from enjoying the services provied by the firm
Binance Coin runs on Tendermint BFT consensus algorithm. The validators are selected by trusted members of the Binance community. The intention is to expand to more members and the ecosystem grows and matures over time.
Trustnodes explains that the decentalized part of the new Binance DEX is non existent because Binance can do whatever it likes on the platform. Since the validation in the network is not open, users cannot know whether they have taken BNB or if they have printed new tokens.
Thus, Binance will have to increase the trust that users have on the new platform if it wants to expand in the market as it has been doing for almost the last two years.