Binance, the largest cryptocurrency exchange by traded volume, has issued guidelines imposing stricter obligations on token issuers and liquidity providers.
The new rules require projects to disclose the identity, legal entity and contract terms of their market maker. They also prohibit profit-sharing and guaranteed return agreements, which the exchange says can create incentives inconsistent with fair trading. Token lending agreements must clearly state how borrowed tokens can be used.
The rules are “intended to help projects exercise greater due diligence on their market-making partners and remind users to be attentive to market conditions,” a Binance spokesperson said in an email. The company seeks to foster “a fair and efficient marketplace, and we do not tolerate any misconduct.”
The new policy targets a part of the crypto market that often operates behind the scenes. Market makers typically post buy and sell orders to keep trading active and reduce sharp price swings, 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 has reported behaviors such as sales that conflict with token release schedules, one-sided trading, and activities that inflate volume without moving prices naturally.
In the blog post, Binance said it would take “swift and decisive action against any misconduct,” including blacklisting market makers. It is unclear whether Binance plans to name the market makers it blacklists.
