Binance blocked market maker of GPS and SHELL tokens
On March 9, the Binance exchange blocked a marketmaker that served the GoPlus Security (GPS) and MyShell (SHELL) projects after discovering irregularities in its operations.
The actions were taken due to manipulation of orders or liquidity. To protect the interests of users, the platform banned the market maker from operating on the exchange and confiscated its funds, which will be used to compensate the affected users of GPS and SHELL.
According to the statement, representatives of the projects will later announce the details of the payments.
Binance has likely blocked Chinese company Whisper. Changpeng Zhao, founder of the trading platform, shared a tweet by analyst Quai Dong about its involvement.
According to EA, the scheme started with venture capital firm Spark Digital Capital. Initially, the firm provided projects with financial support and marketmaking in exchange for free tokens.
However, as competition increased between 2021 and 2022, this approach lost popularity. Spark changed its strategy and launched Web3Port service for deals and attracting venture funds in return for 1-3% free tokens.
According to Dong, the new model wasn’t profitable enough. That’s when Web3Port founded Whisper. This structure allegedly masqueraded as a liquidity provider to sell tokens left by the team. The ultimate buyers of these assets became retail investors on Binance, the expert said.
This article was originally Posted on Coinpaper.com
