Binance Crackdown: Bans Market Maker & Compensates Users in $GPS, $SHELL Case

• Binance permanently bans market maker over misconduct with $GPS and $SHELL tokens.  
• Confiscated funds from market maker to compensate affected $GPS and $SHELL users.  
• Binance introduces a governance model and new features for greater transparency and user control.

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

Specifically, the exchange banned the market maker permanently. This action came after Binance discovered violations of its policies. These violations included participation in both token markets involved in the misconduct.

Binance to Compensate Users with Seized Funds from Misconduct

Going further, Binance also took proceeds from the market maker’s non-compliant activities. The purpose of this action is to compensate affected users. The exchange has promised to share its compensation plan in the coming days.

The platform acted quickly. This swift response occurred when it found out that a market maker responsible for trading $GPS was also involved in $SHELL’s market activities. This breach of Binance’s policies immediately led to suspending the market maker’s activities. Following this suspension, the permanent ban from future participation was enacted.

Related: Binance Lists GoPlus Security (GPS) Token, Adds to HODLer Airdrop Program

Funds Confiscated to Repay Affected Token Holders

Beyond banning the market maker, Binance also used all funds obtained through non-compliant activities. These proceeds will be used to repay affected holders of the $GPS and $SHELL tokens. 

While the exchange has not yet revealed the exact details of how users will be compensated, it did confirm that a compensation plan will be announced soon. Significantly, the plan will outline the eligibility criteria, distribution methods, and expected timelines for compensation.

Binance has made it clear its commitment to protecting its users. They are also focused on keeping a fair trading environment. A spokesperson for the exchange stated that protecting users is a top priority. Adding to this, the recent incident demonstrates its active stance in identifying and addressing misconduct. 

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

Right after the announcement, the price of $GPS dropped by 7.5% . However, $SHELL recovered after a decline; it is now trading at $0.3019 . Even with this market uncertainty, Binance remains firm in enforcing strict trading standards.

The exchange also launched a new governance model on March 7. This new model allows users with at least 0.01 BNB to vote on token listings and delistings. This change provides the Binance community a direct influence on the platform’s decision-making process. Ultimately, this aims to increase transparency and accountability.

Related: Binance Announces Monthly Monitoring Tag Reviews, Enhancing Transparency for Risky Tokens

Additionally, Binance has also introduced pre-market trading, direct spot listings, and Launchpool farming incentives. The exchange clarified that it does not charge listing fees. Moreover, it intends to return marketing funds to users as airdrops.