Binance shuts down GPS & SHELL market maker over misconduct, affected users to be compensated

According to a March 9 announcement on Binance’s official blog, the exchange suspended the organization from market making activities and seized its revenue to compensate affected users. The details of the compensation plan will be announced by the respective projects later.

Market makers are companies or people who continuously place buy and sell orders to ensure smooth trading and reduce price volatility. However, unethical market making practices such as order book manipulation can distort prices or provide unfair advantages to market makers.

The relevant market maker has violated Binance’s rules, including maintaining a fair order book with balanced buy and sell orders, ensuring adequate liquidity, and preventing destructive trading behavior. To protect users’ interests and market integrity, Binance has shut down the organization.

Following the announcement, GPS fell more than 14% due to investor uncertainty, while Shell has recovered from a 4% drop. Binance reiterated its commitment to ensuring that all market participants strictly adhere to trading standards and that appropriate action will be taken against those who do not.

The move is part of Binance’s larger initiative to improve accountability and transparency. Users can now vote on token listings and delistings thanks to the new governance model introduced by the exchange on March 7. Binance users holding at least 0.01 BNB will be able to influence which projects are listed or delisted.

Binance has also added several listing features, including pre-trading of certain tokens, direct spot listings, and Launchpool farming incentives. The exchange says it does not charge listing fees and notifies users when projects allocate marketing budgets for their listings. These funds will then be returned to users in the form of an airdrop.

Regarding the current state of the cryptocurrency sector, Binance founder Changpeng Zhao mentioned in a March 10 post on X that too much money is being spent on short-term profits rather than helping ethical teams aim for long-term growth. He stressed the need for patience and strategic investments for long-term success in the cryptocurrency industry.