Chivo Clamps Down on Scalping
Crypto News

Chivo Clamps Down on Scalping

8mo ago

Opportunistic traders have been engaging in arbitrage — and attempting to see whether they can make a fast buck by accessing a more generous rate on exchanges.

Chivo Clamps Down on Scalping

Table of Contents

El Salvador has announced new plans to crack down on those who are exploiting the Chivo wallet to make a quick profit on Bitcoin.

The government’s official crypto app offers a price freeze feature that ensures Bitcoin’s exchange rate remains static for one minute until a transaction is completed.

Unfortunately, opportunistic traders have been taking this opportunity to engage in arbitrage — and attempting to see whether they can make a fast buck by accessing a more generous rate on exchanges. 

Although this practice — which is commonly known as scalping — is legal, Chivo fears this could result in “endless” profits, describing it as “fraud.”

What’s Going to Change

It appears that Chivo has devised a relatively simple solution to get around this problem.

From now on, the app’s users will be unable to see the rate where Bitcoin’s price has been frozen — denying scalpers the intelligence they need to hunt for arbitrage opportunities.

In the future, conversions will take place in real time, meaning that prices won’t be frozen at all. 

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