Cryptocurrency platform MyShell severed ties with a rogue market maker after Binance uncovered irregular trading activity involving GPS and SHELL tokens, where approximately $5 million in liquidity was drained from the market through aggressive selling.
The market maker, now permanently banned from Binance, sold an astounding 70 million GPS tokens within a 21-hour period without placing matching buy orders, violating the exchange’s market making policies. Project teams confirmed that no buy orders were placed during this aggressive sell-off period. The aggressive selling spree triggered a 30% price drop in GPS tokens within an hour of the announcement, while SHELL tokens experienced a sympathetic 15% decline.
Rogue market maker dumps 70M GPS tokens in under a day, crashing prices and earning permanent ban from Binance.
In response to the March 7, 2025 notification from Binance, MyShell swiftly suspended all accounts associated with the rogue market maker and transferred remaining assets to a new partner. The platform announced a thorough buyback plan using stablecoins obtained from the market maker’s sales, to be executed over a 90-day period with publicly verifiable wallet addresses. The evolving regulatory landscape across different jurisdictions has prompted exchanges to strengthen their compliance frameworks.
Binance’s enforcement actions included confiscating proceeds from the non-compliant activities, with funds earmarked for compensating affected users. The exchange’s crackdown highlights growing concerns about market manipulation in cryptocurrency trading and the need for stringent oversight of liquidity providers. Evidence linked the market maker to Spark Digital Capital, which had recently pivoted from supporting blockchain projects to more aggressive trading strategies.
MyShell has committed to enhanced transparency measures, promising regular updates on the buyback progress and maintaining open communication with both Binance and its community. The platform’s quick response and commitment to rectifying the situation demonstrate the evolving maturity of cryptocurrency market infrastructure.
The incident has sparked industry-wide implications, with other exchanges likely to implement stricter policies regarding market maker conduct. This event serves as a watershed moment for the cryptocurrency industry, emphasizing the critical balance between maintaining market liquidity and protecting retail investors from manipulative practices.
As the dust settles, the focus shifts to rebuilding investor confidence and establishing more robust mechanisms for monitoring trading activities across digital asset markets.
