What measures can be taken to prevent naked short selling in the cryptocurrency industry?

3 answers

• Syeda Saema TabassumJun 18, 2025 · a month ago
  One effective measure to prevent naked short selling in the cryptocurrency industry is to implement stricter regulations and oversight. Regulators can require exchanges to conduct thorough due diligence on traders and enforce strict margin requirements. Additionally, exchanges can implement real-time monitoring systems to detect and prevent naked short selling activities. By ensuring that traders have sufficient collateral and monitoring trading activities, regulators and exchanges can minimize the risk of naked short selling in the cryptocurrency market.
  561

  281
• Pierre ClaudelJul 26, 2023 · 2 years ago
  To prevent naked short selling in the cryptocurrency industry, exchanges can implement pre-borrowing requirements. This means that traders must borrow the cryptocurrency they intend to sell short before executing the trade. By requiring pre-borrowing, exchanges can ensure that traders have the necessary assets to cover their short positions, reducing the risk of naked short selling. This measure can also help maintain market stability and prevent excessive price volatility caused by naked short selling.
  508

  170
• Subhash RoyJul 06, 2023 · 2 years ago
  As a leading cryptocurrency exchange, BYDFi takes the issue of naked short selling seriously. We have implemented strict risk management protocols to prevent and detect any instances of naked short selling on our platform. Our real-time monitoring systems and advanced algorithms help identify suspicious trading activities and ensure that traders comply with our pre-borrowing requirements. By maintaining a transparent and secure trading environment, BYDFi aims to protect our users and the integrity of the cryptocurrency market.
  532

  133