Binance, the largest crypto exchange by volume traded, released guidelines that place tighter obligations on token issuers and liquidity providers.
The new rules require projects to disclose their market maker’s identity, legal entity and contract terms. They also ban profit-sharing and guaranteed return schemes, which the exchange said can create incentives that conflict with fair trading. Token lending agreements must clearly state how borrowed tokens can be used.
The rules are “intended to help projects conduct stronger due diligence on their market-making partners and remind users to be aware of market conditions,” a Binance spokesperson said in an email. The company seeks to promote “a fair and efficient marketplace, and we do not tolerate misconduct.”
The new policy targets a segment of the crypto market that often works behind the scenes. Market makers usually send buy and sell orders to keep trading active and reduce sharp swings in price, which in a healthy market can help users buy or sell without major slippage, especially when a token is newly listed.
Binance said problems arise when companies act less like neutral liquidity providers and more like sellers with hidden incentives. The exchange flagged behavior such as selling that clashes with token release plans, one-sided trading, and activity that inflates volume without moving prices in a natural way.
In the blog post, Binance said it will take “swift, decisive action against any form of wrongdoing,” including blacklisting market makers. It is unclear whether Binance plans to name the market makers it blacklists.
