Binance Cuts Ties with Market Maker That Gained $38M from MOVE Token Sales

The leading cryptocurrency exchange has offboarded an unidentified market maker that failed to comply with the platform’s rules a few months ago.

According to Binance, the market maker associated with the interoperable application blockchain Movement dumped millions of the network’s native token, MOVE, within 24 hours of its listing on the crypto exchange on December 9. The massive sales earned the market maker approximately $38 million in profits in Tether (USDT).

Binance Offboards Market Maker

Binance revealed that the market maker had little buy-side support, so its profits were at the expense of users.

Notably, this unnamed entity is tied to another market maker that Binance has banned for misconduct. This one engaged in improper conduct after Binance listed GPS, the native asset of the decentralized security layer GoPlus Security, and SHELL, the native token of the artificial intelligence consumer project MyShell. Binance offboarded the market maker and confiscated its proceeds to compensate GPS and SHELL users.

After Binance discovered the 66 million MOVE dump, it similarly offboarded the market maker on March 18, forbidding the firm from any further activities on the exchange. The latest announcement is just to inform the crypto community of the situation. The crypto exchange has forbidden the entity from engaging in market-making activities on the platform.

Binance has also informed the Movement Labs and Movement Network Foundation, entities fostering development in the Movement ecosystem, about the incident. The crypto exchange will use frozen proceeds from the market maker’s misconduct to compensate MOVE users.

Movement Network Foundation Takes Action

In a blog post, the Movement Foundation disclosed that it was unaware of the incident with the market maker until Binance brought its attention to an investigation into the firm’s practices. The foundation said it has cut ties with the market maker, informed other exchanges, and recovered the funds with a plan to buy back MOVE on public markets.

The Movement Foundation will use the cash proceeds recovered from the market maker to establish the Movement Strategic Reserve, facilitating the $38 million USDT buyback program geared toward returning the USDT liquidity to the ecosystem.

“In our commitment to transparency and community, purchases of $MOVE using the 38M $USDT recovered from the market maker will occur on Binance over the next three months,” the foundation added.

Meanwhile, MOVE reacted to the news, jumping almost 6% in the past 24 hours, per data from CoinMarketCap.