How Do Exchanges Ensure the Transparency of Block Trade Execution Prices?
Exchanges ensure transparency by requiring that all block trades, despite being negotiated privately, must be reported to the exchange and publicly disseminated within a short time frame. They also enforce rules that the execution price must be within the range of the current market prices (best bid and offer) to prevent abusive pricing.
This ensures the market is aware of the large transaction, maintaining price integrity.
Glossar
Block Trade Reporting
Disclosure ⎊ Block trade reporting, within cryptocurrency and derivatives markets, signifies the regulated communication of large transaction details to designated authorities and, often, to the public.
Block Trade Execution
Execution ⎊ Block trade execution within cryptocurrency derivatives signifies the coordinated facilitation of large-volume transactions, often exceeding typical exchange liquidity, minimizing market impact through strategic order placement.
Transparency
Principle ⎊ Transparency in a public blockchain context means that all transactions, contract code, and network activity are openly recorded and auditable by any participant.