Binance has banned an unidentified market maker for GoPlus Security and MyShell tokens. The cryptocurrency exchange also confiscated all profits from their operations.
The exchange announced the decision Sunday following an internal investigation. The market maker's identity remains unknown, fueling widespread speculation across the cryptocurrency industry.
"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," the exchange stated in its March 9 announcement.
Binance said the seized funds will compensate affected users. The projects themselves will determine compensation distribution details. The exchange emphasized that all authorized market makers must maintain sufficient order size, ensure stable bid-ask spreads and avoid market manipulation through high-frequency trading.
Several major industry players have denied involvement in the controversy. Animoca Brands issued a statement on X: "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)."
GSR, a prominent crypto market-making firm, similarly distanced itself from the situation. The company confirmed it is an investor and partner of GoPlus but does not conduct market-making activities for the project.
Industry insider AB Kuai Dong has suggested a potential connection to May Liu, also known as Piaopiao. According to Kuai Dong, Liu founded Spark Digital Capital in Shanghai, a firm allegedly engaged in market outsourcing under the guise of venture capital. Liu reportedly later transitioned to incubating Web3 projects through Web3Port and ran a market-making firm called Whisper.
"Whisper has become a specially packaged project in the industry and has been listed on Binance's brokerage assembly line," Kuai Dong alleged. "Binance's retail investors have also become long-term ATMs." These claims remain unverified.
Further complicating matters, Cryptorank data reveals GPS and SHELL share several common venture capital investors. These include YZi Labs (formerly Binance Labs), OKX Ventures, and HashKey Capital. This overlap has intensified speculation about potential connections between the projects and their market maker.
GPS price has decreased over 7% since Monday, trading at $0.03977. The SHELL token has increased nearly 10% during the same period, selling for $0.2973.