- Binance now requires full market maker disclosure including identity, legal entity, and contract terms
- Profit sharing and guaranteed return deals banned to prevent market manipulation risks
- Binance to blacklist non compliant market makers and monitor trading behavior closely
Binance has introduced new rules to improve transparency and trading standards on its platform. Token issuers must now disclose full details about their market makers, including identity and contract terms.
The exchange has also banned profit-sharing and guaranteed-return agreements. These changes aim to create a more balanced and transparent trading environment.
Disclosure Requirements and Strict Enforcement
Under the new rules, token issuers must clearly disclose who their market makers are. This includes their legal identity and full contract terms. Binance requires this information to be submitted without delay.
Token lending agreements must also state exactly how borrowed tokens will be used. This helps prevent misuse during trading. The goal is to ensure that all activity remains clear and trackable.
Binance said it will take “swift, decisive action against any misconduct.” This includes blacklisting market makers who break the rules. It is not yet clear if these names will be made public.
The responsibility now falls on both projects and liquidity providers. Issuers must choose compliant partners, and market makers must follow the rules. Failure to comply may lead to removal from the platform.
Ban on Profit Sharing and Guaranteed Returns
The exchange has banned profit-sharing and guaranteed-return deals between projects and market makers. Binance stated that such arrangements can create unfair incentives.
These structures may push market makers to act against natural market conditions. Removing them helps reduce the risk of artificial trading behavior.
Market makers are expected to remain neutral participants. Their role is to support liquidity, not influence price direction. The updated rules reinforce this standard.
By removing these agreements, Binance aims to support fair price discovery. This also helps protect traders from distorted market activity.
Closer Monitoring of Trading Behavior
Binance confirmed that it will increase monitoring of market maker activity. The platform will track trading patterns to detect unusual behavior.
This includes one-sided trading and volume spikes that do not match price movement. The exchange is also watching for sales that conflict with token release schedules.
Such actions can disrupt supply balance and affect trading conditions. Binance plans to use internal systems to identify these patterns early.
The goal is to maintain stable and fair markets. Increased monitoring helps reduce irregular activity and supports better trading conditions.
Role of Market Makers in Crypto Markets
Market makers help maintain liquidity by placing buy and sell orders. This allows users to trade without large price swings.
Their role is especially important for newly listed tokens. Strong liquidity helps improve execution and reduce slippage.
Binance noted that issues arise when market makers move away from this role. Some may act as sellers or inflate trading volume.
The updated guidelines aim to correct this behavior. By setting clear rules, Binance is working to keep market activity balanced and transparent.
Source: https://www.livebitcoinnews.com/binance-tightens-rules-on-market-makers-and-token-issuer-disclosures/
