Binance issues market maker guidelines and risk signals

Binance issued new guidelines for market makers, outlining risk signals, prohibited activities, and operational principles to prevent harmful practices.

Binance, a leading global crypto asset exchange, published its Market Maker Operation Guidelines on March 31. These guidelines detail essential risk signals for identifying harmful market-making activities and set forth operational principles that projects must adhere to. Market makers play a crucial role by providing liquidity and stabilizing prices through balancing buy and sell orders. Binance highlighted risk signals such as large-scale sell-offs aligned with token issuance schedules, repeated unilateral selling, simultaneous large-scale sales across multiple exchanges, abnormal trading volumes not matching price movements, sharp price swings during liquidity shortages, and mismatches between trading volume and liquidity. The guidelines also require clear definitions in token lending contracts, prohibit price manipulation and liquidity distortion, and ban profit-sharing or guaranteed profit arrangements with market makers. Binance aims to foster a trustworthy trading environment by sharing relevant information and insights with market participants.