- Binance suspended a market maker associated with GoPlus Security and MyShell for breaking trading regulations, such as order book manipulation and imbalanced liquidity.
- The trading took the profit of the market maker and will utilize it in order to cover impacted GPS and SHELL token holders.
- Binance unveiled a new governance model where users holding a minimum of 0.01 BNB can vote for token listings and delistings, together with new listing functionalities such as pre-market trading and Launchpool incentives.
Binance has suspended a market maker associated with GoPlus Security and MyShell following the discovery of abnormal trading activities. The exchange suspended the market maker from its platform and froze its profits, adding that the proceeds will go to compensating users who were affected.
Binance has not disclosed how the compensation will be done but vowed to post the information soon.
Market Violation and Binance Response
The illicit party was a market maker of the GPS token and was also active in SHELL’s market, which contravened the trading rules of Binance. The market maker was accused of order book manipulation and not rendering balanced liquidity, causing drastic price movements.
GPS experienced a severe decline of more than 14%, whereas SHELL fell initially by 4% but came back up. It confirmed that it would continue to take severe action against non-compliant market players to safeguard users and ensure market integrity.
The exchange clarified that the GPS token was already being closely monitored following unexpected price drops. It was subsequently discovered that the prohibited market maker had rapidly offloaded 70 million GPS tokens, draining around $5 million of liquidity without making matching buy orders.
This resulted in huge losses for early traders. At first, Binance just froze the account of the market maker, but after a deeper probe, it chose to indefinitely remove the entity and seize its profits.
A spokesperson declared that providing a secure trading platform is the company’s main goal, and it will keep enhancing monitoring systems to avoid such problems.
The exchange also cautioned all of its market makers to adhere to its rules that encompass a well-balanced book of orders, stable spreads, and the stopping of disorderly trading activity.
New Governance and Listing Rules
Apart from this move, Binance launched a new system of governance a short while back whereby users may vote on listing and delisting tokens. Such voting is possible for users in possession of as little as 0.01 BNB, although it continues to dictate which tokens become eligible for this purpose.
The exchange also introduced new listing options including pre-market trading, direct spot listings, and Launchpool farming rewards. Binance assured customers that it doesn’t take listing fees, and any marketing budget distributed by projects for listings will be distributed back to users through airdrops.
At the same time, Binance’s founder, Changpeng Zhao, spoke of the situation around the crypto market, stating that too many short-term gains overrule the fact that investors prioritize supporting ethical and long-term-growth projects instead. Binance’s recent decisions show its tendency to adhere more to stricter regulation measures, growing transparency, and greater protection of users.
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