$38M Market Maker Controversy Triggers Binance Crackdown

Key Points

• $38M Market Maker Controversy Triggers Binance Crackdown
• Web3port accused of making $38M from one token via market-making
• Binance froze funds and demanded user compensation after investigation
• Questions arise over Binance’s 4-month delay in taking action

Market makers are supposed to be the unsung heroes of crypto trading—ensuring smooth transactions, providing liquidity, and reducing price swings. In theory, they make trading better for everyone.

But the recent market maker controversy surrounding Web3port has sparked serious questions. Is this system helping retail traders, or quietly bleeding them dry?

Web3port, a name tied to multiple tokens listed on Binance—like GoPlus Security (GPS), Myshell (SHELL), and Movement (MOVE)—is under fire after reports revealed it made a staggering $38 million profit on just one project.

Source – 陈剑Jason – Techtoken

Crypto analyst Jason Chen blew the whistle, alleging that while retail investors watched their tokens plunge, Web3port quietly raked in profits through suspicious trading behavior.

“It’s basically confirmed that Web3port is behind the market making for several recent projects—and they made $38 million from just one,” Chen said.

This claim shook the crypto world. Not only did it expose the immense power a market maker can hold over token prices, but it also suggested that they might be manipulating trades for personal gain—leaving everyday users to bear the losses.

This isn’t the first time market manipulation has raised alarms. Earlier this year, market fears were triggered when Trump’s crypto corruption warning surfaced, further amplifying concerns about deep-pocketed actors tilting the market for profit.

Source – Colin Wu – Techtoken

Binance Responds, But Was It Too Late?

When the accusations became public, Binance, the world’s largest crypto exchange, took action. It froze Web3port’s earnings, delisted them from its Market Maker Program, and demanded the MOVE project compensate harmed users.

Binance admitted that the market maker offloaded 66 million MOVE tokens a day after launch with barely any buy-side support. The result? A brutal crash in price, affecting thousands of unsuspecting investors.

How market makers make money. Source: B2Broker – Techtoken

That might sound like justice—but many in the community think it came too late.

Respected journalist Colin Wu pointed out a major red flag: the dump happened back in December 2024, but Binance didn’t act until March 2025.

“How could Binance not have noticed this in December? Why the delay?” Wu questioned.

The crypto community is wondering—was Binance complicit? Or did it simply turn a blind eye because the heightened trading volume meant more fee revenue?

Adding fuel to the fire, Binance has already faced scrutiny over market-making practices. In 2023, the U.S. SEC accused Binance of enabling wash trading through its associated firm Sigma Chain. That case ended with a $4.3 billion fine—one of the largest in crypto history.

More recently, Binance has been under pressure amid BNB Chain stablecoin rumors, making the timing of this crackdown appear even more strategic. It could be an effort to protect its image during increasing regulatory scrutiny.

Are Market Makers the Good Guys—or Crypto’s Hidden Villains?

Market makers are supposed to keep crypto trading efficient. They place constant buy and sell orders to ensure there’s always someone on the other side of your trade.

Without them, we’d have massive slippage, wide spreads, and chaotic price swings. But as this market maker controversy shows, they also wield immense power—power that can be abused.

Here’s how the Web3port situation played out:

• A project launches with hype and listing support

• The market maker accumulates tokens at low prices

• It then dumps massive volumes post-launch

• Prices crash, and retail traders suffer

• Meanwhile, the market maker walks away with millions

And the cycle repeats.

This isn’t just about one company. Web3port is simply the latest name in a long list of suspicious actors. Many now believe that the “liquidity support” from market makers is just a cover for price manipulation.

The biggest concern? It’s all happening on the platforms we trust most. Exchanges like Binance create the rules for market makers, reward them, and provide the tools they need. But when these same entities are slow to react—or benefit from the chaos—it undermines trust across the board.

Even worse, history tells us that market makers might’ve played roles in bigger collapses too. The Terra Luna disaster, which saw its stablecoin UST depeg and crash, was rumored to have involved large coordinated sell-offs by major players.

In similar fashion, large moves like the Mt. Gox Bitcoin payout have recently shaken market confidence, proving that massive whale activity still has a huge impact on prices.

Meanwhile, smaller projects like Pumpswap are showing explosive growth—but the fear remains: are market makers inflating the numbers, only to dump later?

This ongoing market maker controversy also echoes broader legal battles, such as the Ripple vs SEC lawsuit that highlighted how opaque trading practices can hurt ordinary investors.

So now, a critical question looms for the industry:
Are market makers stabilizers or saboteurs?

Until better transparency and stricter oversight exist, retail investors may continue to bear the risk while a few powerful entities walk away with millions.