Binance Reinforces Market Making Guidelines Following Market Volatility Incident

Binance Introduces Stricter Rules for Token Issuers and Market Makers

Binance, the world's largest crypto exchange, has tightened its rules for token issuers and providers of liquidity on the platform in response to criticism of digital-asset market practices. According to a blog post, Binance will no longer allow crypto projects to have revenue-sharing models with market makers, and market makers will be prohibited from engaging with projects to manipulate prices or distort liquidity of tokens.

Binance has emphasized its commitment to ensuring transparency and integrity across the crypto industry, with a focus on protecting users and maintaining a fair, trustworthy trading environment. The exchange has also outlined six red flags that signal manipulative market-making behaviors, including persistent sell-side orders without buy-side activity and coordinated token deposits and selling activity across different exchanges.

As part of its new rules, Binance will require crypto projects to report details about their market makers, including legal entity and contract terms. The exchange has also stated that it will take swift action against any misconduct, including blacklisting market makers.

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The move comes as the crypto industry faces increased scrutiny following the October market meltdown, which wiped out $19 billion in leveraged bets. The incident has led to a decline in investor confidence, particularly among retail investors, who are still reeling from the crash.

Market makers, which play a crucial role in the crypto market by providing liquidity, have been criticized for their practices during the meltdown. Binance has sought to address these concerns by introducing stricter regulations and promoting transparency in the market.

Key Figures:

• $19 billion: Amount of leveraged bets wiped out in the October market meltdown
• Binance: World's largest crypto exchange
• CZ Zhao: Co-founder and former CEO of Binance

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