Key Insights:
- Binance offboarded a market maker linked to MOVE token irregularities.
- The market maker profited 38 million USDT before being removed.
- Proceeds were frozen to compensate affected users, pending a plan.
In what seems like a move against a market-making participant engaged in a dubious MOVE token activity, cryptocurrency exchange Binance has now taken the required action. This comes as an investigation into irregular market behaviors involving the sales and trading of MOVE tokens. Binance resolved this by removing the MOVE token market maker from its platform. In addition, the exchange froze a considerable amount of 38 million USD in proceeds created by the market maker’s actions.
Binance Takes Swift Action to Address Irregular Market Behavior
The market maker in question had been operating as part of Binance’s ecosystem, working to make the market for the MOVE token, a token by Movement Labs. The market maker’s actions were denounced shortly after MOVE was listed on the exchange in December 2024. On December 10, 2024, a market maker was said to have moved his 66 million MOVE tokens in a single day. This is virtually without corresponding buying orders to balance the selling pressure, as the source noted. Binance, therefore, dug deeper into the market maker’s activities since this behavior raised some red flags in the exchange.
Tapping into a bullish run propelling this token higher, Binance has listed the MOVE token. There was significant demand for the trading action. These actions are not at all irregular. For a given token, they can disrupt the overall market health, which creates volatility within the token and the entire trading ecosystem.
The investigation revealed that the market maker’s actions were contrary to Binance’s internal market-making principles. According to Binance, this is against the precepts of fairness, transparency, and stability. The net profit from the market maker’s action, which was designed to profit at the expense of other users, was 38 million USDT until March 18, 2025, when the market maker was offboarded.
Market Maker’s Irregular Actions and Impact on the MOVE Token
The trading activity itself appeared to be irregular, and the timing and amount of sales made by the market maker were frequent points of irregular trading activity. MOVE token was listed on May 10; a day later, it sold 66 million tokens through Binance and claimed it to be an anomaly. The use of market makers is important for its liquidity role as they place orders at specified prices for buyers and sellers, and so prices stay put, and there are no pronounced price fluctuations.
The market maker in question, however, did not take that into account. On December 10, because there were no buy orders and sellers were dumping tokens, it is possible there was an artificial deficit in the market. This behavior is disruptive (affects the price movement) since it does not reflect the real market demand and can be misleading to other traders. Due to this irregular behavior, Binance decided to offboard the market maker off its platform.
Freezing Proceeds to Compensate Affected Users
However, to protect those who may have been affected by the market maker’s action, Binance took the drastic approach of freezing the proceeds acquired through trading by the market maker. The project’s team will develop a compensation plan later and use these 38 million USDT in frozen proceeds to compensate affected users.
As part of its ongoing efforts to protect users who suffer from market disruption, whether willful or not, Binance decided to freeze the proceeds. The users will most likely be compensated for their time by taking into account how much trading has occurred during and surrounding the irregular market behavior. This will guarantee that only those who so suffered market manipulation are made good of any losses suffered.
In response to this incident, Binance also gave a reminder to all project teams that market making rules need to be followed. Binance standards for authorized market makers include a set of standards that aim to make the market fair, stable, and equal. These principles revolve around both placing buy and sell orders, having enough size in the order placed in the specified depth levels, and preventing market disruption by placing or canceling orders often.
Any project’s authorized market makers caught in breach of these rules will suffer heavy consequences. In addition to being removed from the platform, this may also involve legal action.