Binance now requires market makers to share details like who they are and the specifics of their trading agreements.
Binance Tightens The Grip On Market Makers
Binance, the world’s biggest cryptocurrency exchange, announced new rules on Wednesday for those creating and providing tokens. These rules require more transparency about who market makers are – including their legal details and agreements. Binance is also prohibiting any arrangements that promise guaranteed profits or shared returns.
Binance explains that a market maker is a professional trader or company who ensures there are always buy and sell orders available on cryptocurrency exchanges. They profit from the small difference between the prices they buy and sell at – this difference is called the ‘spread’. By doing this, they help other traders buy and sell quickly without significantly impacting the price.
Top 3 Red Flags That Market Makers Should Look For
Binance has identified five warning signs of potentially problematic projects. These include rapidly selling off tokens before they’re fully released, unbalanced buy and sell activity, and coordinated efforts to sell tokens across multiple platforms.
1. Selling against the vesting schedule
Market makers need to follow the established plan for releasing tokens. If they begin selling off large quantities prematurely, frequently, or in a way that deviates from the agreed-upon schedule, it suggests there are problems with their motivations or insufficient safeguards in place.
2. One‑sided “liquidity”
Good market making aims to offer equal buying and selling opportunities. However, if one party consistently places sell orders without similar buy orders, it can push prices down and make trading unstable.
3. Coordinated dumping across venues
If a large amount of a cryptocurrency is moved across multiple exchanges rapidly, and then followed by significant selling pressure beyond normal trading adjustments, it often suggests someone is intentionally selling off their holdings, rather than simply repositioning them for typical market operations.
Binance is advising market makers to be cautious of unusual trading activity, like price changes not supported by volume, sudden price swings due to low trading activity, and large sell-offs of tokens. Token projects launching on Binance will now be expected to stick closely to their token release schedules, avoid using market makers to dump large amounts of tokens, fully identify their market makers and what those market makers are authorized to do, have clear and documented trading rules, and consistently monitor trading activity after their token is listed.
We prohibit arrangements where profits are shared, deals that guarantee returns between projects and those who trade them, and any token lending agreements that aren’t specific about how the borrowed tokens will be used.
These new rules are designed to protect the overall health of the market. Good market makers help trading by making it easier to buy and sell assets quickly and at fair prices. Binance has stated it will quickly punish anyone who breaks these rules, potentially banning market makers who try to unfairly influence prices or don’t follow agreed-upon token release plans.
Binance is acknowledging that its efforts to boost trading volume – known as “liquidity support” – have also been used for unofficial sales and artificially inflated numbers. They’re likely trying to get ahead of potential market crashes and stricter rules from regulators. These new changes could benefit everyday traders by providing clearer trading information, reducing sudden price drops on new tokens, and making the process of launching new tokens more transparent.
Those most likely to suffer negative consequences are smaller cryptocurrency creators and market makers who depended on unofficial promises or shared profits to increase trading activity and access funds.
For traders, the key is to focus on how easily you can buy and sell (order book depth and slippage) rather than just the overall trading volume. Be careful when new, smaller cryptocurrencies are first listed, as the market adjusts. And, expect some trading pairs to become less liquid as active traders pull back.
From my analysis, if Binance starts actively blocking and reporting manipulative trading, it’ll make it more expensive for people to try and artificially inflate prices. While this might mean fewer quick, short-term pumps, I believe it will ultimately lead to more stable and accurate price setting on the platform over time.
Cover image from Perplexity, BTCUSD chart from Tradingview
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2026-03-26 16:17