Two tokens launched through the HODLer airdrop have been continuously falling since their listing on Binance, raising user concerns; one token that was newly launched on Launchpool modified its community airdrop ratio right before market opening, angering the community. Recently, the three new assets RED, GPS, and SHELL that were continuously listed on Binance have exposed 'hidden ailments' within the project circle, prompting Binance, which has the obligation to audit, to take decisive action.
On March 6, Binance urgently halted the listing of RED, a move that brought a turnaround for community users defending the Red Stone project. However, the top exchange's tough stance does not stop here; it is even more explosive.
On March 7 and 9, Binance exposed a market maker for GPS who continuously sold 70 million GPS tokens, deeming it 'violative,' and found that the market maker was also involved in SHELL's market-making activities. The profit account of this market maker was frozen by Binance, and it received a market-making ban from the platform. Subsequently, both project parties proposed buyback and other user compensation plans.
The consecutive incidents of new tokens have officially opened the curtain on Binance's rectification of the internal market. The 'voting for listing/delisting' mechanism has been integrated into the new asset review system. Furthermore, Binance has updated the frequency for adding 'monitoring labels' to listed tokens to 'monthly,' continuing to review the performance of assets on the platform, and any that do not meet the standards will be delisted.
As the cryptocurrency asset market enters a downward trend, popular tokens and new assets, despite having potential traffic effects, the world's largest cryptocurrency trading platform has decided to tighten access restrictions and implement stricter market entry thresholds, which is a wake-up call for project parties that 'listing on Binance means reaching the endpoint.'
Abnormal candlestick patterns are questioned; Binance exposes the violative market maker.
The anomalies are exposed through the candlestick patterns.
In early March, the token GPS (GoPlus Security), launched from the Binance HODLer airdrop, experienced a continuous decline after entering the Binance spot trading market. After listing on March 4, GPS opened at approximately $0.104, closing that day at about $0.068, peaking at about $0.151, which remains its highest point on Binance to date. Subsequently, GPS continued to decline, dropping to about $0.032 at its lowest, and now it is only $0.038, nearly halving from its first-day closing price and down 74.83% from its peak.
This blockchain project, primarily focused on Web3 security, has shown itself to be quite unsafe in the secondary market. However, within just over a week, it has completed a trend that some older cryptocurrencies take a bull and bear cycle to experience.
Users participating in the GPS secondary market trading have expressed strong dissatisfaction, leading to doubts about the HODLer airdrop product as well, because the token project SHELL (My Shell), which went live through this airdrop channel in February, exhibited the same downward trend, having halved from an initial closing price of around $0.59 to about $0.257.
Compared to the other two HODLer airdrop projects, GPS and SHELL exhibited a 'waterfall' trend (data as of March 10).
In contrast, the tokens KAITO and LAYER launched from the HODLer airdrop experienced fluctuations in line with the market, while GPS and SHELL's waterfall trend appeared unusual. Many users raised doubts on social media, asking, 'Is the project party dumping on Binance?'
Until March 7, Binance announced its own 'big scoop' that GPS was tagged with a 'monitoring label' due to a significant price drop after it was listed on the spot market, where a certain market maker exhibited abnormal market behavior. Binance acted swiftly, directly freezing the market maker's account.
According to Binance's investigation results, from March 4 at 21:00 Beijing time to the next day at 17:55, this market maker sold approximately 70 million GPS tokens within 21 hours without placing any buy orders; after spot trading opened, the market maker continued to sell tokens, netting approximately 5 million USDT in profit, becoming the largest profit maker.
Upon hearing the news, the market was in an uproar, and users seemed to have found the reason for GPS's continuous decline, while Binance's investigation was not yet over.
On March 9, Binance announced that this market maker was also responsible for the market-making activities of MyShell (SHELL). Although Binance has not yet disclosed the name of the market maker, it explicitly classified the market maker's actions as 'violative' and struck two major blows: delisting the market maker and banning it from any market-making activities on Binance; confiscating the market maker's related earnings and using them to compensate users of the GPS and SHELL projects.
Binance's strong measures have also prompted remedial actions from project parties.
On March 10, MyShell stated that after receiving the Binance investigation report, it had terminated its relationship with the abnormal market maker and introduced several new partners to ensure stable liquidity. All Binance accounts related to this market maker have been suspended, and all remaining assets will be transferred to new market makers. Additionally, all stablecoins sold by the market maker will be used for buying back SHELL within 90 days, and the official will announce the wallet addresses related to the buyback for community verification.
On March 11, GoPlus Security stated on platform X that the 4.34 million USDT generated from GPS trading by the market maker's account frozen by Binance would return to the project's control after undergoing regulatory processes, and within 90 days, these funds would be used to buy back GPS tokens, with all bought-back tokens to be permanently destroyed. In addition to the buyback, GoPlus Security will allocate an additional $2 million to compensate users who net purchased during the period of the market maker's violations on Binance. This compensation plan includes both spot and leveraged users.
In response to the anomalies of the two projects, Binance's actions have received much praise from users. Its response to the market makers of GPS and SHELL can be seen as a form of self-defense for platform users. Some users believe that Binance has only pulled back the curtain on the problematic projects, stating, 'GPS and SHELL had long been on other exchanges, but the market maker issues had never been discovered; it was just waiting for the launch on Binance to cut the users here.'
People hope that platforms providing trading venues can conduct stricter audits and oversee the entire process of project tokens entering the market, and Binance is adopting these voices.
Community voices need to be echoed; users can vote for 'listing/delisting.'
On March 7, Binance announced an optimization of its listing/delisting policies, adding a 'voting for listing' and 'voting for delisting' mechanism to achieve community governance. It stated that the platform would not profit from asset listings and would continue to disclose each project's marketing expenses in listing announcements, distributing airdrops to Binance users in batches based on the token unlock schedule.
Another new coin incident from Binance may have propelled the introduction of new mechanisms.
On March 6, the modular blockchain project RED (Red Stone) was unexpectedly halted by Binance 20 minutes before its planned launch on the spot market due to 'RedStone (RED) unexpectedly changing its community airdrop distribution at the last minute,' meaning the project party had temporarily reduced the initially promised 9.5% of the total supply of tokens to the community to 5%.
At this point, RedStone's sudden increase in airdrop eligibility criteria has left many community members who worked hard on-chain transactions without receiving airdrops, and the manipulative actions are evidently fuelling community outrage, which has clearly transmitted to Binance.
After Binance's strong stance towards project teams unilaterally changing economic models, RedStone compromised by releasing an additional 2% from the 'Ecosystem & Data Providers' fund pool to compensate community contributors who did not receive airdrops.
On the same day that the RED incident was temporarily resolved, Binance added a 'community governance' dimension to its listing and delisting processes.
Binance stated that the community has provided many valuable opinions on asset listings. The platform always values community voices and has decided to comprehensively optimize the listing mechanism after testing and evaluation. The 'voting for listing/delisting' will grant users more rights to participate in decision-making, with the core goal being to provide users with opportunities for value discovery while ensuring project quality, innovation, and compliance.
According to the specific mechanisms announced by Binance, users with a mother account holding no less than 0.01 BNB can vote to support their favorite projects. High-vote projects that pass due diligence will be listed on Binance. The platform will select projects from the market and the Alpha observation zone to enter the voting pool; for projects without product development updates, lacking community and project maintenance, failing to regularly disclose progress, issuing additional tokens, or exhibiting major risk behaviors, Binance will list them in the main site 'Risk Monitoring Zone' and will mark projects that do not cooperate in providing token-related information. Users can express their intentions to delist projects already in the 'Risk Monitoring Zone' through voting.
This means that being listed on Binance is not the endpoint for project parties; they may very well be delisted due to user voting.
In addition, Binance has also clarified the new asset listing channels in its governance content, which mainly include:
Binance has clarified four new listing channels and the pre-market trading mechanism.
It is worth noting that Binance will include the 'pre-market' trading mechanism in the governance process for listing assets when RED goes live, but has decided to cancel the price limit restrictions designed for pre-market trading. Some traders analyze that this move is beneficial in reducing the platform's intervention in price, allowing for a more market-driven price discovery for new assets.
Binance stated that the 'pre-market' trading can provide users with the opportunity to gain early access to Launchpool token trading, while also offering users the chance for early value discovery before tokens are officially listed on the spot market. At the same time, Binance warns that while pre-market trading can provide users with strategic layout and early profit opportunities, participants must understand the qualification requirements and potential risks.
Is listing on Binance a pass? Multi-dimensional reviews have just begun.
Binance's actions regarding the three problematic projects also signify that this largest trading platform in terms of trading volume will begin to select new assets more stringently this year, and the acceptance of strict review processes will not only apply to listings.
On March 4, Binance announced that the frequency of adding 'monitoring labels' to already listed assets would change from irregular adjustments to 'monthly,' meaning new projects will be added in the first week of each month; while removing monitoring labels and seed labels will remain on a 'quarterly' review basis.
In other words, Binance will conduct more frequent evaluations of the performance of already listed assets. Once tagged with 'monitoring,' to remove the label, a project must perform well within a quarterly range; otherwise, the probability of being delisted will significantly increase.
'Adding a monitoring label' is Binance's ongoing periodic review method for relatively mature cryptocurrency asset projects. Once a project is added with a 'monitoring label,' it means these tokens may have higher volatility and risk; when they no longer meet Binance's listing standards, they may also be delisted.
27 tokens have been added with 'monitoring labels' in the Binance market.
Tokens entering the 'Monitoring Zone' will display a risk warning banner on Binance. Users will also be practically audited on their understanding of the risks associated with 'Monitoring Label' tokens—if users want to trade tokens with a 'Monitoring Label', they need to complete a test every 90 days to gain trading permissions after accepting the terms of use.
As of now, 27 tokens have been tagged with a 'monitoring label,' including new tokens like GPS that have just entered due to violations, as well as well-known market tokens like ZEC, FTT, BAL, and ARK.
So, what are the standards for adding or removing the 'monitoring label'?
Binance has also listed audit reference factors in its various listing announcements, including the team's commitment to the project, the level and quality of project advancement, trading volume and liquidity, resistance to attacks while maintaining network stability and security, stability of the network/smart contracts, community maintenance, responsiveness to Binance's regular audits, unethical/fraudulent behavior, and contributions to the overall blockchain ecosystem.
In addition, the GPS market maker incident will prompt Binance to conduct 'post-listing reviews' that emphasize the liquidity performance.
In the announcement of the investigation results regarding GPS, Binance reprimanded all authorized market makers of projects on its platform, demanding that they comply with platform rules; otherwise, Binance will take action. These principles and rules include:
Ensure that both buy and sell orders have sufficient support.
Ensure there is enough order size at the specified depth level.
Provide healthy and stable market depth in the trading market.
Ensure that orders remain for a certain period to avoid high-frequency order cancellations disrupting the market.
On March 13, Binance's stringent review 'sword' pointed towards its Web3 wallet's early project discovery platform Alpha, stating that it will regularly review the 'monitoring selection pool,' removing any tokens that do not meet the platform's 'quantitative indicators' and 'qualitative standards' from Alpha. On the day of the announcement, 21 tokens were removed.
Binance Alpha's 'two determinations' framework includes:
Quantitative indicators: trading volume stability, liquidity depth, on-chain transaction frequency, token holder distribution, and other related indicators.
Qualitative standards: credibility of the project team, regulatory compliance, ecosystem synergy, community recognition, and other relevant factors.
Since its launch, the Alpha product has been interpreted by the outside world as an important pool for Binance to select new assets from the on-chain ecosystem. Although it does not guarantee that they will be listed on the Binance main site, its asset observation zone gathers many tokens with market heat. Some projects that underwent exclusive TGE (Genesis issuance) on the Binance Web3 wallet have directly entered the Alpha selection pool, with some receiving 'tickets' to enter the Binance main site.
Now, under the new 'two determinations' review standards, a large number of tokens have been removed, which also means that in order for tokens to be recognized by Binance from Alpha, they must first pass the 'two determinations' stage, and then go through user 'voting.' Even if they pass and get listed, they must continue to undergo platform reviews, always alert to the possibility of being tagged with a 'monitoring label.'
This stringent review initiated by the new coin turmoil is also a 'wake-up call' from the world's largest trading platform to the project circle.
Whether it is the past marketing tactics of 'accumulating points, promoting interaction, and obtaining airdrops' that became popular on-chain, or the mentality of 'first listing on a small platform to establish credibility, then listing on a large platform to harvest,' all of these will to some extent dismantle project parties' fantasy that 'listing on Binance means achieving their goals' amid Binance's increasingly stringent asset listing reviews, trading monitoring, and potential delisting through voting.
In the current downturn of the entire cryptocurrency asset market, Binance's actions can be described as 'cutting poison to the bone,' demonstrating the determination to 'guard the gatekeeper even at the cost of sacrificing the potential trading capacity of hot assets.' This is also a necessary reform that a leading commercial entity in the industry must undertake against the backdrop of the cryptocurrency market moving towards compliance.
(Disclaimer: Readers are advised to strictly adhere to local laws and regulations; this article does not constitute any investment advice.)