Binance Bans Market Maker for GoPlus Security (GPS) and MyShell (SHELL)

Binance has taken decisive action against the market maker for GoPlus Security (GPS) and MyShell (SHELL). The trading platform banned

Binance has taken decisive action against the market maker for GoPlus Security (GPS) and MyShell (SHELL), banning them from further activities on the exchange and seizing all profits from their operations.

However, the identity of the market maker remains a mystery, sparking widespread speculation within the cryptocurrency community.

In an official statement on March 9, Binance announced that its investigation uncovered misconduct by a market maker associated with GPS and SHELL.

“Our investigation has found that a project-authorized market maker has been engaging in activities that violate Binance's principles for market-makers, despite repeated warnings and guidance from Binance. As a result, we will be immediately shutting down the market maker's operations on Binance and confiscating the remaining proceeds from their activities to compensate affected users. The respective projects will decide on the best way to handle the confiscated funds and provide compensation to users,” the exchange explained.

The statement clarifies that all authorized market makers must adhere to strict principles, including maintaining sufficient order size, ensuring a stable bid-ask spread, and avoiding market manipulation through high-frequency trading. Any violations will lead to severe penalties.

“Any project-authorized market makers who do not comply with or breach such principles and rules, Binance will take further actions against such market makers to best protect our users,” Binance added.

The lack of transparency regarding the market maker's identity has led to speculation about which entity might be responsible. However, some major industry players have explicitly denied any involvement.

Animoca Brands, a well-known investor in blockchain projects, has categorically denied being the market maker for GPS and SHELL.

“In response to queries, Animoca Brands wishes to clarify it is not involved in market-making activities for GoPlus Security ($GPS) and/or MyShell ($SHELL). Animoca Ventures is an investor in both projects and has no knowledge of the market maker’s identity,” the company stated on X.

Similarly, GSR, a leading crypto market-making firm, has issued a statement distancing itself from the controversy. It also indicated that while it is an investor and partner of GoPlus, it does not engage in market-making activities.

"We can confirm that we are not the market maker referenced in Binance’s statement regarding GoPlus Security and remain committed to upholding the highest standards of integrity and transparency with our clients. We invite any relevant parties to contact us directly to verify our involvement or lack thereof in any given project or activity."

Amid the speculation, industry insider AB Kuai Dong has suggested a potential link to May Liu, also known as Piaopiao, and her past ventures in crypto market making.

According to Kuai Dong, Liu was the founder of Spark Digital Capital in Shanghai, a firm allegedly engaged in market outsourcing under venture capital (VC) guise. As VC standards tightened in 2021-2022, Liu transitioned to incubating Web3 projects through Web3Port and ran a market-making firm called Whisper, providing liquidity services and facilitating project listings on the Binance exchange.

"Whisper has become a specially packaged project in the industry and has been listed on Binance’s brokerage assembly line. Binance’s retail investors have also become long-term ATMs. The so-called one-year quick pass through Binance, to some extent they did it, and did it for a long time."

While Kuai Dong's claims remain unverified, they suggest a broader trend of market-making firms operating under multiple guises within the crypto ecosystem.

Another layer of intrigue comes from Cryptorank data, which shows GPS and SHELL share several common VC investors. YZi Labs (formerly Binance Labs), OKX Ventures, and HashKey Capital are among them.

This overlap has fueled speculation about potential behind-the-scenes connections between the projects and their market maker.

As investigations continue, the key question remains: Who is the market maker behind GPS and SHELL? The answer may have broader implications for transparency and regulatory compliance in the crypto market.

Data on CoinGecko shows that the GPS price has decreased by over 7% since Monday’s session opened, trading for $0.03977 at press time. Conversely, the price of the SHELL token has been up by almost 10% in the same timeframe and was selling for $0.2973.