With rampant irregularities in active market makers, Binance has finally begun to rectify the situation.

Author: Deep Tide TechFlow

On March 25, Binance published a blog post with a very restrained title: "A Red Flag Guide for Crypto Market Makers".

But those in the industry know that the true meaning of this blog post can be summed up in one sentence: I know what you're doing, and I reserve the right to deal with you at any time.

After experiencing a series of market maker scandals involving GPS, SHELL, and MOVE, Binance decided to explicitly put the power it had been quietly exercising into its rules for the first time.

New species in the bear market

To understand this announcement, we must first understand what the term "active market maker" means.

In a bull market, every project has buyers, and market makers have a simple job: place orders, provide liquidity on both sides, and collect commission rebates—they live comfortably and respectably. They are true "liquidity providers"; the market needs them, but it doesn't depend on them entirely.

The bear market shattered all of that.

With buying interest drying up and no new money entering the blockchain, the trading volume of the vast majority of altcoins will be halved or even halved again in 2026. A medium-sized new project listing on Binance may not be able to support its daily trading volume with real users, and its price will plummet. For the project team, this is a slow death.

Just then, a group of people appeared, bringing with them a complete set of persuasive talking points:

"I'll back your tokens, I'll guarantee the liquidity, I'll stabilize the price for you—it's all in black and white in the contract."

This is the active market maker, a popular species born out of the bear market.

Their business model is fundamentally different from that of traditional market makers: instead of making money from the bid-ask spread, they directly participate in the project's token distribution, acquire a batch of zero-cost tokens, and then sell them off under the legal guise of "market making".

How exactly does it work? The tricks have already been thoroughly dissected by those in the industry:

The project team's token cost is zero; the market maker's real cost is leverage—leveraging USDT as margin for two-way liquidity. However, the brilliance of active market makers lies in the fact that they often provide only one-way liquidity: they only provide tokens, not USDT. The buying liquidity is there, making the order book appear healthy, but once retail investors start selling in large quantities, the other side simply can't absorb it. The price collapses just like that.

The manipulation tactics of GPS market maker Web3Port are a textbook example: within 21 hours of listing, they only sold and did not buy, dumping 70 million tokens and making a profit of approximately $5 million. GPS plummeted from $0.14 to $0.04, a drop of 60%, during which buying interest almost completely dried up. SHELL, from the same team, steadily declined from $2.3 to $0.3, with the two crash curves almost mirroring each other.

Ironically, Web3Port wasn't just a market maker; it was a complete supply chain: the incubator was responsible for exchanging 1% to 3% of free tokens from early-stage projects, its market maker Whisper handled the cashing out and selling, projects accepted harsh conditions to get listed, and retail investors were the only ones left holding the bag at the end of the chain. The entire chain, from acquiring tokens to cashing out and leaving, was watertight.

The statement made by Manta co-founder Victorji on X is probably the most honest expression in the industry: "We receive invitations from so-called active market makers and OTCs almost every day. They don't look at the project's fundamentals at all." He also mentioned that Manta was marketed by Three Arrows during the Polkadot era. The other party took more than 3% of the tokens, turned around and dumped them, and even swore that they would not sell the coins.

Three scandals plus a public humiliation

Binance's recent announcement has sparked discussion about its timing, with some suggesting it's a response to the pressure from last October's massive market crash. While this interpretation isn't entirely wrong, it misses the point.

The October crash was a resounding slap in the face for Binance, but what really made Binance uneasy was the repeated successes of market makers on its platform since the beginning of 2025, one, two, three times, and each time they made a huge commotion that couldn't be contained.

After the GPS incident broke out, KOLs in the industry began to delve into Web3Port's market-making landscape and discovered that it served more than just GPS and SHELL—Aethir, dappOS, Movement, Puffer... a long list of names came to mind, and the market began to panic.

The MOVE incident was the final straw: market makers dumped 66 million tokens, illegally profiting 38 million USDT. This figure could not be explained by "normal market fluctuations" and directly ignited doubts in the community about Binance's regulatory capabilities.

Then there's SIREN, the drama that happened just 48 hours before the announcement.

SIREN, a token initially launched on the BNB Chain as an "AI agent analyst," was almost forgotten by the market after its release in early 2025. However, starting in February 2026, a mysterious wallet cluster began large-scale accumulation. By March 22, SIREN had surged from approximately $0.08 to an all-time high of $3.61, an increase of over 45 times, and its market capitalization briefly exceeded $2.2 billion, briefly entering the top 30 global crypto market capitalization, surpassing OKB and UNI.

The blockchain detective immediately took action.

On March 22, Bubblemaps issued a warning: a cluster of addresses consisting of more than 200 wallets held approximately 50% of the circulating supply of SIREN, worth about $1.5 billion at the time, and wrote, "There can only be one ending." Hours later, the crash began.

Chain analyst EmberCN further investigated and discovered that the actual level of control far exceeded expectations: among the top 54 holders of circulating tokens, 52 belonged to the same entity, controlling a total of 644 million SIREN, accounting for 88.5% of the total circulating supply, equivalent to approximately $1.44 billion at peak prices. In the entire market, retail investors were essentially gambling against a one-man show.

ZachXBT then linked these wallets to DWF Labs, pointing out that the addresses in question had on-chain connections to several obscure tokens (LADYS, RACA, TOMO) previously handled by DWF. Zac, co-founder of DWF Labs, immediately denied involvement, but on-chain evidence was already abundant.

The manipulation tactics were more sophisticated than those of GPS and MOVE. Market makers first pushed up prices to lure short sellers, then reversed course and liquidated all short positions, triggering forced liquidations of $2.4 million and $4.7 million on Binance and Bybit, respectively. Funding rate data showed that from March 14th, SIREN consistently exhibited high negative funding rates, meaning short sellers were essentially paying for the long positions every hour, essentially footing the bill for the market manipulators' pump-and-dump scheme. In the early hours of March 23rd, the Gate spot market experienced a 78% surge within 10 minutes, with a trading volume of only about $450,000, yet leveraged liquidations ensued.

On March 24, the crash began. Within 72 hours, SIREN plummeted 71% from its peak, its market capitalization shrinking from $2.2 billion to $740 million. Some on X called it "the biggest scam of 2026."

This scenario involves a crucial detail that differs from the GPS scenario: Binance twice adjusted the weighting of various exchanges in the SIREN futures price index, attempting to reduce the impact of manipulation by a single exchange. This indicates that Binance itself was aware that something was wrong with the market.

GPS was the beginning, MOVE was the upgrade, and SIREN was a complete public humiliation, and it happened on Binance's own listed futures contracts.

Binance's consistent approach has been reactive enforcement: freezing accounts, confiscating illegal gains, and delisting market makers when issues arise. This method might quell public opinion in a single incident, but after three instances of SIREN being added to the list, the situation has changed. The market is starting to ask: Are you unaware, or are you pretending not to know?

This is the real issue that the announcement on March 25th aimed to address. It's not about cracking down on market makers, but about rebuilding one's own credibility.

Power hidden in the rules

A careful reading of this announcement reveals that Binance's six "red flag behaviors" have covered the entire set of manipulative tactics employed by active market makers: aggressive selling that conflicts with token release plans; placing one-sided sell orders; coordinated selling across platforms; abnormally high trading volume that is inconsistent with price movements; and abnormal price fluctuations caused by insufficient liquidity.

Each entry is a precise profile of GPS, SHELL, and MOVE case studies.

But more importantly, there's the understated statement behind the rules: Binance will take swift and decisive action against any misconduct, including blacklisting market makers.

On Binance, Web3Port has already demonstrated what a blacklist means: account freezing, confiscation of all illegal gains, and a ban on future market-making activities on Binance. For a market maker who relies on the Binance platform for survival, this is essentially a death sentence.

This is the core content of the announcement, and also the least discussed part: Binance is formally institutionalizing the discretion it has been quietly exercising in the form of rules.

Previously, Binance's intervention was an "emergency response after an investigation revealed a problem"; now, Binance's intervention is "legitimate enforcement based on written rules." The nature of these actions is entirely different. The former was reactive firefighting, while the latter is proactive deterrence.

The targets of this deterrence are not just market makers.

The new rules require token projects to disclose the identity, legal entity, and contractual terms of market makers to Binance, prohibiting profit-sharing agreements and guaranteed return arrangements. This means that every project wanting to list on Binance must now bring its profit-sharing arrangements with market makers under Binance's scrutiny.

Who is your market maker? How was the contract signed? Is there profit sharing? Is there a guaranteed minimum return?

The project team's response determines whether you can be listed on the coin and whether you can stay on Binance.

What can rules solve, and what can't they solve?

Returning to the practical question: Can these new regulations eradicate the chaos surrounding active market makers?

The honest answer is: most likely not.

Binance can only monitor activities that occur on its platform. However, active market makers often coordinate across platforms, pumping and dumping on platform A and transferring on-chain funds through multiple shell addresses. It is difficult for a single exchange to provide a comprehensive view of these activities.

The more fundamental problem is that the token distribution mechanism itself hasn't changed. As long as project teams continue to use "free tokens in exchange for market-making services," and as long as market makers can still use zero-cost tokens as ammunition for unloading their holdings, the motivation for active market makers to reap profits will not disappear. Just change the name, the shell, and the platform, and the game will continue.

Binance's new rules have a real loophole in their design: Is the blacklist made public? A blacklist that is not made public is a sword hanging over market makers' heads, but only Binance knows where that sword will end up.

CryptobraveHQ (@cryptobraveHQ) commented after Binance's announcement: "This move is more like a disclaimer from the platform, because the platform has always been aware of such incidents in the past, present, and future. Active market makers are illegal in any jurisdiction, and the whistleblower materials should be submitted to the relevant regulators and public security authorities simultaneously, rather than just remaining at the level of internal review."

That hit a nerve.

Binance's internal blacklist is far from sufficient from a legal standpoint. Genuine accountability requires regulatory intervention and law enforcement agencies, not just exchanges acting as judges themselves.

The active market maker supply chain will continue to operate during a bear market, but the costs will be higher, the risk of being caught will be greater, and the pressure of being publicly named will be greater. This is already the most the industry can secure at present.

Retail investors need to understand that comprehending the logic of market makers doesn't guarantee victory in this war of information asymmetry. But at least you'll know who the referee, the players, and the chips on the table are in this game.