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Binance has taken swift action against a market maker involved in irregular trading activities for GoPlus Security (GPS) and MyShell (SHELL). According to the exchange’s official report, the market maker was found to be engaging in unethical practices, prompting Binance to take drastic measures.
The exchange has permanently banned the market maker from conducting any further market-making activities on its platform. Additionally, all proceeds earned by the market maker will be confiscated and used to compensate impacted users. The exact compensation plans will be outlined by the respective projects at a later date.
It is essential for approved market makers to follow strict guidelines set by Binance. These rules include maintaining adequate order volumes, consistently managing bid-ask spreads, as well as refraining from manipulative practices such as high-frequency trading. Any breaches of these rules may result in severe consequences.
Rumors surrounding the market maker’s identity have been swirling, with many speculating about which entity could be involved. However, Animoca Brands, a prominent player in the Web3 space, has explicitly denied any connection to the scandal. In their statement, they clarified that they do not engage in market-making activities for GPS and SHELL.
GSR, another significant player in the crypto space, also released a statement affirming its innocence. While acknowledging its role as an investor and partner of GoPlus Security, GSR emphasized that it does not provide market-making services for the project. The company reaffirmed its commitment to maintaining the highest standards of integrity and transparency with clients.
The move by Binance serves as a stark reminder of the importance of transparency and compliance within the digital asset industry.
Source: https://cryptopotato.com/binance-bans-market-maker-for-gps-and-shell-after-trading-irregularities/
