Binance Shuts Down Two Market Makers

The largest crypto exchange Binance has blocked the activities of another market maker for illegal behavior that resulted in multi-million dollar losses for users. The blocking concerns the organization behind the formation of the Movement (MOVE) cryptocurrency trading market from December 10 to March 18, which received illegal profits of $38 million, RBC Crypto writes about this.

Market makers play a key role on crypto exchanges, helping to provide liquidity for traders. Their main task is to ensure significant supply and demand for a particular asset, as well as maintaining a high level of trading activity. Market makers set bid and ask prices for trading pairs, and can also act as a buyer or seller in a transaction if there is no suitable counterparty. Who are crypto market makers. Why are they needed and how do they make money

Binance said an unnamed market maker sold 66 million Movement (MOVE) tokens shortly after listing the asset on December 10, raising about $38 million by March 18. Binance said all of the market maker’s proceeds have been frozen. The Movement Network Foundation, which is behind the project, has ended all partnerships with the organization and has launched a buyback plan for that amount over the next three months.

Since its listing on Binance on December 10, the price of MOVE has been in the range of $0.62–1.22 for a month, with a peak of $1.41 on December 11. Since early January, MOVE quotes have been declining, reaching a minimum of $0.37 by early March. The price minimum coincided with purchases of the MOVE token by a crypto project supported by the family of US President Donald Trump – on March 5, World Liberty Financial (WLF) bought 3.42 million MOVE at a rate of $0.438 ($1.5 million).

World Liberty Financial is a crypto platform where users can borrow and lend crypto assets, create liquidity pools, and trade stablecoins. It uses its own token, WLFI, as a governance token. The platform itself runs on the Ethereum blockchain and the largest lending protocol on the market, Aave. The project's website documents list Donald Trump as its “chief human rights advocate.” His sons Eric and Donald Trump Jr. are “web3 ambassadors,” and Barron holds the title of “DeFi visionary.” Movement (MOVE) is the cryptocurrency of the Movement blockchain project (a second-layer network for scaling Ethereum), launched in early December 2024. According to the Arkham analytics platform as of March 25, MOVE is among the five largest WLF purchases (excluding stablecoins) after ETH and its wrapped version, the wrapped version of Bitcoin WBTC, the Tron blockchain token (TRX) and Mantle (MNT). The team behind the Movement blockchain network, Movement Labs, has raised over $41 million in venture capital since 2023 from YZi Labs (formerly Binance Labs), Polychain Capital, OKX Ventures, Robot Ventures and several other investors. The key feature of the project is that it is based on the developments of the Diem blockchain project from Meta (recognized as an extremist organization in Russia and banned). Diem's developments and the Move programming language they use were also used to launch the Sui and Aptos blockchains. However, Movement did not launch an independent blockchain network, but was launched as an add-on for Ethereum.

“Binance will take further action against any authorized market maker projects that fail to comply with or violate these principles and rules in order to best protect its users,” the platform said.

This blocking of the market maker on the Binance exchange is the second since the beginning of March. As in the case of MOVE, the exchange reported that it had identified violations in its work and confiscated the service's profits, which it sent to compensate the affected users. Previously, this concerned crypto projects GoPlus Security (GPS) and MyShell (SHELL).

As noted by Binance, both incidents are related. According to analyst Kuai Dong, quoted by Binance founder Changpeng Zhao, the market makers are associated with the venture capital firm Spark Digital Capital, founded by entrepreneur Mei Liu.

Both GPS and SHELL tokens have seen significant declines since their listing on Binance in late February and early March. Since then, the tokens have fallen by 60% and 77%, respectively, as of March 25.

In general, the trend of token prices falling after the start of trading on Binance is nothing new. According to the analytical panel on Dune, out of 25 projects, only two have positive dynamics (NEIRO and JUP), all the others fell after the start of trading in the range below 90%.

The last token listing on Dune dates back to early October. The panel has not been updated since then.

Источник: cryptocurrency.tech