Binance Requires Token Issuers To Reveal Market Maker Partners And Contract Details

TLDR

• Binance requires token issuers to disclose market maker identities and contracts
• Profit-sharing and guaranteed returns are now banned on the platform
• Exchange warns of action against manipulative trading and fake volume
• Market makers may face blacklisting for violating new trading rule

Binance is tightening its rules for market makers and token issuers, requiring full disclosure of partners and banning profit-sharing or guaranteed returns. The exchange aims to prevent manipulative trading, ensure fair liquidity, and monitor activity closely, signaling stronger oversight after criticism of market practices during last year’s crypto downturn.

Binance tightens rules on market makers

Binance has introduced new rules for market makers and token issuers on its platform. The exchange aims to improve transparency and trading fairness. These changes follow criticism after a market downturn in October.

The company now requires token issuers to disclose their market maker partners. This includes identity, legal entity, and contract details. The goal is to ensure clear accountability in trading relationships.

Binance said the rules will help projects conduct stronger checks on partners. It also wants users to remain aware of market conditions. A spokesperson said the platform does not tolerate misconduct.

The exchange added that it will monitor activity closely. It plans to take action if any rule violations occur. This includes restricting or banning certain participants.

Ban on profit-sharing and guaranteed returns

The updated policy bans profit-sharing agreements between projects and market makers. It also blocks any guaranteed-return arrangements. Binance said such deals can create conflicts of interest.

Market makers are expected to act as neutral liquidity providers. However, some firms have acted with hidden incentives. This can affect token prices and trading conditions.

Binance stated that such practices may distort liquidity. They can also mislead traders about actual demand. The exchange aims to reduce these risks with the new rules.

Token lending agreements must also be clear. They need to explain how borrowed tokens are used. This ensures transparency in how supply enters the market.

Monitoring and enforcement measures increase

Binance said it will take swift action against misconduct. This includes blacklisting market makers when necessary. However, it did not confirm if names will be made public.

The exchange flagged several risky behaviors. These include selling against token release schedules and one-sided trading. It also warned against inflating trading volume artificially.

Market makers play a key role in crypto trading. They provide liquidity and help reduce price swings. This is especially important during new token listings.

Binance said problems arise when firms act like sellers instead of neutral participants. Such actions can harm market balance. The platform aims to prevent this through tighter oversight.

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