Original Title: "Binance Rectifies Active Market Makers, A Delayed Judgment"
Original Author: Deep Tide TechFlow
On March 25, Binance published a blog post with a very restrained title—"The Red Flag Guide for Cryptocurrency Market Makers."
But those in the industry know that the real meaning of this blog post can be summed up in one sentence: I know what you are doing; I reserve the right to deal with you at any time.
After experiencing scandals involving GPS, SHELL, MOVE, and other market makers, Binance decided for the first time to clearly document the power it has been exercising discreetly into explicit rules.
New Species in a Bear Market
To understand this announcement, one must first clarify what the term "active market makers" means.
In a bull market, there are buyers for every project, making the work of market makers simple: place orders, provide bilateral liquidity, collect fee rebates, and live well and with dignity. They are truly "liquidity providers"; the market needs them but does not entirely rely on them.
The bear market shattered all of this.
With buying power exhausted and no new money flowing onto the chain, the trading volume of the vast majority of altcoins was halved and halved again in 2026. For a medium-sized new project launched on Binance, relying on real users might not support the daily trading volume, leading to a swift price drop. For project teams, this becomes a slow death.
At this moment, a group of people appeared, armed with a complete set of rhetoric:
"I will support your token, liquidity will rest on me, I will stabilize the price, and it’s all in black and white in the contract."
This is the active market maker, a popular species birthed by the bear market.
Their business model is fundamentally different from traditional market makers: they do not profit from the bid-ask spread but directly participate in the token distribution of the project team, acquiring a batch of zero-cost chips, and then selling them off under the guise of "market making."
How do they operate? The tricks have already been thoroughly analyzed by insiders:
The tokens in the hands of the project team cost zero; the real cost for market makers is leverage—putting in USDT as collateral for bilateral liquidity. But the brilliance of active market makers lies in that they often provide unilateral liquidity: only providing tokens, not USDT. The buying liquidity looks healthy on the order book, but once retail investors start selling in large amounts, the counterparty cannot handle it at all. The price collapses just like that.
The operational methods of GPS market maker Web3Port have already become textbook examples: within 21 hours of launching, they only sold and did not buy, dumping 70 million tokens and making about 5 million dollars in profit. GPS plummeted from $0.14 to $0.04, a drop of 60%, during which the buying power was nearly exhausted. The same team’s SHELL dropped from $2.3 all the way down to $0.3, with both collapse curves nearly mirroring each other.
The irony is that Web3Port is not just a market maker; it is a complete industry chain: the incubator is responsible for exchanging 1% to 3% of free tokens from early project teams, and their market maker Whisper is responsible for monetization. Project teams accept harsh conditions to get listed, and retail investors are the only ones left at the end of the chain. The entire chain from acquiring chips to cashing out is impenetrable.
Manta co-founder victorji said on X that this was probably the most honest expression in the industry: "We basically receive so-called active market maker and OTC invitations every day, and they have no regard for the fundamentals of the project." He also mentioned that Manta was market-made by Three Arrows during the Polkadot era, which led to them taking over more than 3% of tokens, only to sell them off immediately while swearing they wouldn’t sell the coins.
Three Blowups and One Public Humiliation
With this announcement, some are discussing the timing, suggesting it’s a response to the massive collapse in October. This assertion isn't incorrect, but it misses the point.
The October crash dealt a loud slap to Binance, but what really made Binance uneasy was that since early 2025, active market makers have repeatedly succeeded on their own platform, once, twice, three times, and each time it caused significant commotion that they could not suppress.
After the GPS incident broke out, KOLs in the circle began to deeply investigate Web3Port's market-making landscape and found that it served not only GPS and SHELL—Aethir, dappOS, Movement, Puffer... a long list of names was implicated, and the market began to panic.
The MOVE incident was the last straw: the market maker sold 66 million tokens, illegally profiting 38 million USDT—this figure could no longer be explained as "normal market fluctuations," directly igniting doubts in the community about Binance's regulatory abilities.
Then there was SIREN, which was the drama that just happened within 48 hours before the announcement.
SIREN was a token initially launched on the BNB Chain as an "AI Agent Analyst," and after its launch in early 2025, it was almost forgotten by the market. But starting in February 2026, a mysterious wallet cluster began massively accumulating tokens. By March 22, SIREN skyrocketed from about $0.08 to a historical high of $3.61, an increase of over 45 times, with a market cap that briefly exceeded $2.2 billion, making it into the top 30 cryptocurrency market caps globally, surpassing OKB and UNI.
On-chain detectives swiftly took action.
Bubblemaps issued a warning on March 22: a cluster of addresses consisting of over 200 wallets held about 50% of SIREN's circulating supply, valued at around $1.5 billion at the time, and noted, "There’s only one ending to this." Hours later, the collapse began.
On-chain analyst EmberCN further dug into it and discovered that the actual level of control exceeded expectations: among the top 54 addresses holding tokens, 52 belonged to the same entity, collectively controlling 644 million SIREN, accounting for 88.5% of the circulating total, valued at approximately $1.44 billion at peak prices. In the entire market, retail investor buy orders were just gambling against a solo actor.
ZachXBT subsequently linked this batch of wallets to DWF Labs, pointing out that the relevant addresses had on-chain connections to several obscure tokens, including LADYS, RACA, and TOMO, previously operated by DWF. DWF Labs co-founder Zac immediately denied any involvement, but on-chain evidence was abundant.
The operational methods were even more intricate than those of GPS and MOVE. Market makers first pushed up prices to tempt shorts into the market, then reversed to explode the short positions, triggering liquidations of $2.4 million and $4.7 million in shorts on Binance and Bybit, respectively.
Funding rate data showed that since March 14, SIREN has continuously shown high negative funding rates, with shorts paying the holders every hour, effectively subsidizing the market maker’s price manipulation. In the early hours of March 23, the Gate spot market saw a sudden surge of 78% within 10 minutes, with a trading volume of only about $450,000, yet leveraged liquidations were imminent.
On March 24, the crash began. Within 72 hours, SIREN plummeted 71%, and its market cap shrunk from $2.2 billion to $740 million. Someone on X labeled it as "the biggest scam of 2026."
This drama had one key detail more than GPS: Binance adjusted the weight of each trading platform in the SIREN futures price index twice, attempting to reduce the influence of manipulation by any single trading platform. This indicates that Binance itself also recognized that there were issues in the market.
GPS was just the beginning, MOVE was an upgrade, and SIREN was a complete public humiliation, occurring on contracts listed by Binance themselves.
Binance has always handled situations reactively: freezing accounts, confiscating illegal profits, and delisting market makers after incidents occur. This method can quell public opinion in single incidents, but after three incidents including SIREN, the question has changed. The market began to ask: do you not know, or are you pretending not to know?
This is the true issue that the March 25 announcement aimed to address. It is not about managing market makers; it is about rebuilding their own credibility.
The Power Hidden in Rules
Carefully reading this announcement, the six "red flag behaviors" listed by Binance have comprehensively detailed the entire set of operational methods of active market makers: aggressive selling conflicting with token release plans; unilateral selling orders; cross-platform coordinated sell-offs; abnormally high trading volumes inconsistent with price trends; and abnormal price fluctuations due to insufficient liquidity.
Each point is an accurate portrayal of the GPS, SHELL, and MOVE cases.
But what’s more critical is the understated statement behind the rules: Binance will take swift and decisive action against any misconduct, including blacklisting market makers.
In Binance, what does the blacklist signify? Web3Port has already demonstrated this: account freezes, confiscation of illicit profits, and bans on future market-making activities on Binance. For market makers that rely on the Binance platform for survival, this is essentially equivalent to a death sentence in the industry.
This is the most critical part of this announcement, yet the least discussed: Binance has formalized the discretion it has been exercising quietly into official rules.
Previously, Binance's actions were "emergency responses after discovering issues"; now, Binance's actions are "just enforcement based on explicit rules." The nature is fundamentally different. The former is reactive disaster control; the latter is proactive deterrence.
And the deterrent targets are not just market makers.
The new regulations require token project teams to disclose the identities, legal entities, and contract terms of their market makers to Binance, banning profit-sharing agreements and guaranteed return arrangements. This means that every project team wanting to list on Binance must now put their interests with market makers under Binance's scrutiny.
Who is your market maker? How was the contract signed? Is there a profit-sharing agreement? Is there a guarantee?
The answers from project teams will determine whether you can list your tokens and remain on Binance.
What the Rules Can and Cannot Solve
Returning to the reality of the issue: can this new set of regulations cure the chaos of active market makers?
The honest answer is: probably not.
What Binance can regulate are the behaviors that occur on the Binance platform. However, the operations of active market makers often involve cross-platform coordination, pulling prices on one platform while dumping on another, with on-chain funds circulating through multiple masked addresses, making it difficult for a single trading platform's monitoring to form a comprehensive view.
More fundamentally, the token distribution mechanism itself has not changed. As long as project teams continue to use "free tokens in exchange for market-making services," and as long as market makers can use zero-cost chips as ammunition for selling off, the incentive for active market makers to harvest will not disappear. Changing names, shells, platforms—the game will continue.
There is a real loophole in the design of Binance’s new regulations: is the blacklist public? A non-public blacklist is a sword hanging over market makers, but the direction of that sword is known only to Binance itself.
Crypto Brave (@cryptobraveHQ) stated after the Binance announcement: "This move feels more like a disclaimer from the platform because the platform has always been aware of such events in the past, present, and future. Active market makers are illegal in any jurisdiction, and the reporting materials should be shared with the corresponding regulators and law enforcement, rather than just stopping at internal review."
This hits the nail on the head.
Binance’s internal blacklist is far from sufficient at the legal level. True accountability requires regulatory intervention and law enforcement agencies, and not just trading platforms acting as judges.
The industrial chain of active market makers will continue to operate during the bear market; the only difference is that the costs will increase, the risks of being caught will grow, and the pressure of being publicly named will become greater. This represents the most that the industry can currently strive for.
Retail investors need to understand: understanding the logic of market makers does not mean you can win this war of information asymmetry. But at the very least, you now know who the judges are in this game, who the players are, and who the chips on the table belong to.
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