Binance Bans Market Maker Found Violating Its Policies, to Compensate Affected Users

Binance has taken action against a market maker found involved in misconduct related to the GoPlus Security ($GPS) and MyShell ($SHELL) tokens.

Binance is shutting down a market maker and will compensate users following misconduct in the GoPlus Security (GPS) and MyShell (SHELL) tokens.

What Happened: Cryptocurrency exchange Binance has banned a market maker for future participation and took proceeds from the market maker’s non-compliant activities to compensate users. The move comes after the exchange discovered violations of its policies.

The market maker was banned after Binance discovered the market maker was participating in both the GPS and SHELL token markets despite being involved in misconduct.

“Actions taken on Market Maker for GPS and SHELL due to market irregularities

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Binance to Compensate Users with Seized Funds from Misconduct

Further, Binance will be taking proceeds from the market maker’s non-compliant activities to compensate users who were affected. The exchange says it will be sharing its compensation plan in the “coming days.”

The platform was swift to act after it discovered a market maker who was mainly responsible for trading the GPS token was also involved in the SHELL token’s market activities, which breaches Binance’s policies.

This led to the suspension of the market maker’s activities and, following this, the permanent ban from future participation was enacted.

“We are actively working on a compensation plan, which will be announced soon. The plan will specify the eligibility criteria, distribution methods and expected timelines for compensation.”

Funds Confiscated to Repay Affected Token Holders

In addition to banning the market maker, Binance also used all the funds it obtained through the market maker’s non-compliant activities to compensate the affected holders of the GPS and SHELL tokens.

While the exchange did not disclose the exact details of how users will be compensated, it did confirm that a compensation plan will be announced shortly. The plan will highlight the eligibility criteria, the methods for distributing the funds, and the timeframes within which users can expect to receive compensation.

Binance is keen to protect its users and maintain a fair trading environment. A spokesperson for the exchange said, “At Binance, the protection of our users is paramount, and we maintain an active stance in identifying and addressing any misconduct that comes to our attention.”

$GPS Price Reacts, $SHELL Recovers; New Governance Model Launched

Following the announcement, the price of GPS dropped by 7.5%. However, SHELL recovered after a decline and is now trading at $0.3019.

Binance also launched a new governance model on March 7, where users with at least 0.01 BNB can vote for or against token listings and delistings. This change will provide the Binance community with an opportunity to exert direct influence on the platform’s decision-making processes, ultimately aiming to increase transparency and accountability.

Earlier this year, Binance also introduced pre-market trading, direct spot listings, and Launchpool farming incentives for new tokens. The exchange clarified that it does not charge listing fees and intends to return marketing funds to users in the form of airdrops.