Binance said Wednesday it is imposing tougher requirements on token issuers and market makers operating on its exchange, tightening controls after criticism of market conduct highlighted during the October market collapse.
In a blog post, the exchange laid out a set of new rules that change how crypto projects may interact with liquidity providers. Notably, token issuers are now prohibited from entering into revenue-sharing models with market makers. Binance also said market makers are banned from any engagement designed to manipulate token prices or distort token liquidity.
Binance said it will respond decisively to breaches of its new standards, including the option to blacklist market makers found to have violated the rules. "Were committed to ensuring transparency and integrity across the crypto industry," the exchange wrote in the post, adding that protecting users and maintaining a fair trading environment are priorities.
The changes come against the backdrop of renewed scrutiny on crypto venues following the Oct. 10 crash, which the exchange noted erased $19 billion in leveraged bets. Binance highlighted that the broader digital-asset market has not yet rebounded from that event.
Under the new framework, crypto projects must provide Binance with details about any market makers they engage, including the market makers legal entity and the contractual terms of the arrangement. The exchange also published a list of six red flags meant to help identify manipulative market-making behavior.
Among the behaviors Binance identified as suspicious are "a pattern of persistent sell-side orders" without matching buy-side activity and "coordinated" patterns of deposits and sells across multiple crypto exchanges. These examples are cited as indicators of market-making that could be distorting price discovery or token liquidity.
The post also referenced public comments by Changpeng "CZ" Zhao, Binance's co-founder and former chief executive officer, who said accusations that the platform was responsible for the October market crash are "far-fetched."
Binance concluded its announcement reiterating its commitment to enforcement and to fostering a trading environment that it describes as transparent and trustworthy.
Disclosure: This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.