Binance, the largest cryptocurrency exchange by trading volume, published guidelines imposing stricter obligations on token issuers and liquidity providers.
The new rules require projects to disclose the identity of their market maker, their legal entity, and the terms of the contract. They also prohibit profit sharing and guaranteed return agreements, which the exchange says can create incentives that conflict with fair trade. Token lending agreements should clearly state how the borrowed tokens can be used.
The rules are “intended to help projects conduct stricter 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 foster “a fair and efficient market, and we do not tolerate misconduct.”
The new policy targets a part of the cryptocurrency market that often works behind the scenes. Market makers often post buy and sell orders to keep trades active and reduce wild price swings, which, in a healthy market, can help users buy or sell without large slippages, especially when a token has just been listed.
Binance said problems occur when companies act less as neutral liquidity providers and more as sellers with hidden incentives. The exchange flagged behaviors such as sales that clash with token release schedules, one-sided transactions, and activities that inflate volume without moving prices naturally.
In the blog post, Binance said it will 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.
