Binance has introduced new rules for token issuers and market makers. The new rules require all crypto projects to reveal who their market makers are, the legal entity behind them, and the terms of their contracts. They have also banned profit-sharing and guaranteed returns, which can create conflicts with fair trading.
Source: Binance
Binance said the rules are meant to help projects do better checks on their market-making partners and to also remind users to pay attention to market conditions. The company wants to maintain a fair trading environment and create efficiency, so they have warned that any form of misconduct will not be tolerated.
Typically, market makers are firms or individuals who post buy and sell orders to keep trading active and reduce price swings. In a healthy market, their role helps users trade without losing money to slippage, especially when a token is newly listed.
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However, problems arise when market makers act more like sellers with hidden incentives instead of neutral liquidity providers.
The exchange highlighted that behaviors like selling tokens against release schedules, one-sided trading, and activity that inflates volume without affecting prices naturally occur. The exchange said it will act quickly against any bad behavior, including blacklisting market-makers.
Binance Highlights Market Maker Behavior and Risks
Binance’s new guidance explains which trading patterns could signal manipulation or misaligned incentives. The exchange explained that selling that ignores token unlock schedules, repeated sell-based trading, and large coordinated trades across multiple platforms are some of the signals of market maker manipulation.
Another risk the exchange highlighted is when trading volume looks high but prices barely move, which can indicate wash trading. Price swings in thin order books are also bad signals, because even small trades can cause big changes.
Binance said market makers, when doing their job properly, should properly tighten spreads, deepen liquidity, and reduce slippage. But not all market-making deals are good for long-term market health.
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