Chivo Clamps Down on Scalping
Crypto News

Chivo Clamps Down on Scalping

6 months 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

Inhaltsverzeichnis

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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