Binance, the world’s largest cryptocurrency exchange by trading volume, has released new guidance warning crypto projects and traders about market-making practices that can distort prices, drain liquidity, and erode community trust. The blog post, published on March 25, 2026, targets both token issuers who hire market makers and retail users trading newly listed or volatile assets, aiming to help distinguish legitimate market-making from manipulative activity.
What Are the Six Red Flags?
Binance identified six behavioral red flags that indicate misaligned incentives or manipulation in market-making arrangements:
1. Selling ahead of token release schedules. When a market maker offloads tokens before agreed timelines, it signals weak controls and downward price pressure before the market can absorb supply.
2. One-sided trading behavior. Persistent sell-side orders without matching buy-side activity suggests the market maker is distributing tokens rather than maintaining two-sided liquidity.
3. Coordinated sell-offs across multiple exchanges. Large simultaneous deposits and sales on different platforms beyond normal rebalancing indicate organized distribution, not genuine liquidity management.
4. High trading volume with little or no price movement. This pattern may reflect wash trading, where a market maker trades with itself to inflate volume artificially.
5. Thin order book depth. Shallow liquidity allows small trades to generate outsized price swings, making assets easier to manipulate upward or downward.
6. Profit-sharing or guaranteed-profit arrangements. Binance explicitly prohibits such deals with market makers, as they create conflicts of interest and undermine fair pricing.
Advice for Traders and Projects
For retail traders, Binance recommends assessing order book depth rather than relying solely on volume figures, watching for price behavior that doesn’t track volume in expected ways, and avoiding rushed decisions during early-stage listings or fast-moving markets. Token projects face a higher bar: they must strictly adhere to release schedules, ban large-scale offloading, disclose market maker identities and contract terms, vet partners rigorously, establish clear written mandates covering trading parameters and compliance obligations, and monitor continuously after listing.
Binance stated that it actively monitors market-making activity and will blacklist market makers who violate its rules. Suspected misconduct can be reported to audit@binance.com. The guidance comes amid increasing regulatory enforcement against market manipulation in digital asset markets globally. Binance emphasized that orderly markets depend on participants reflecting real supply and demand, and protecting users from manipulation remains a core priority.