Recently, two projects on Binance, GoPlus Security (GPS) and MyShell (SHELL), staged a 'roller coaster scare.' Market makers directly transformed into 'harvesters,' ruthlessly cutting down both retail investors and project parties, leaving the platform in a state of shock.
The incident began when the GPS token launched, and the price skyrocketed like a rocket from $0.13 to $0.20, only to plummet back down to $0.06 in less than a day. By the time retail investors reacted, the market makers had secretly sold off 70 million tokens, cashing out $5 million and fleeing. Even more astonishingly, Binance's investigation found that this market maker was also manipulating the MyShell token. Although no direct violations were found for now, this operation has already plunged the trust level of both projects to rock bottom.
Now, Binance has acted quickly, blacklisting the market maker and confiscating illegal gains to prepare for user compensation. But the problem is that the compensation plan is still in the works, and the response from the project parties is even more laughable. The founder of GoPlus apologized while deflecting blame, claiming the team was inexperienced and was tricked by the market maker, and he assured that he had never sold any tokens. On the MyShell side, silence is golden; they are probably still figuring out how to soothe investors.
This incident once again exposed the ugly face of market makers in the cryptocurrency space. These so-called 'liquidity providers' have now become 'legal operators,' manipulating prices with algorithms and colluding with project parties to harvest retail investors. Ironically, the FBI recently uncovered a significant case of market makers colluding to issue fraudulent tokens, and here we have the real-life version of 'Harvesting 2.0.' It seems in the crypto world, regulation can never keep up with the speed of the sickle.
For retail investors, stop being superstitious about 'value investing' and 'ecosystem building.' In the unregulated crypto space, market makers are the true 'gods.' Without in-depth research, do not make trading choices lightly.