Original｜Odaily Planet Daily (@OdailyChina)
Market makers (MM) have always been an important role hidden behind crypto projects and trading platforms, earning returns by providing liquidity for token trading.
Recently, the banning of market maker accounts on Binance for projects like GoPlus and MyShell has once again put market makers in the spotlight. What many did not expect was that after achieving listings on Binance and other industry milestones, the real culprit behind the continuous decline of GoPlus and MyShell's corresponding tokens, GPS and SHELL, was actually the project’s partner market maker Web3port. Insider revelations further fueled this controversy: Web3port is backed by a group of crypto institutions from Shanghai. Odaily Planet Daily will briefly summarize this "market maker controversy" for readers' reference.
The Ice and Fire of GPS: Listing on Binance and Facing High-Risk Monitoring
On March 4, Binance officially announced that it would list GoPlus Security (GPS) on March 4, 2025, at 21:00 (Beijing time), and open trading pairs GPS/USDT, GPS/USDC, GPS/BNB, GPS/FDUSD, and GPS/TRY. Additionally, Binance will provide GPS airdrop rewards for users who subscribed BNB to the SimpleEarn product from February 19, 2025, 08:00 (UTC+8) to February 25, 2025, 07:59 (UTC+8).
Once the news broke, the market's FOMO for GPS arrived as expected, with its price briefly surpassing 0.19 USDT, a 24H increase of over 16%.
Subsequently, news of Binance launching GPS leveraged trading and simple earning services and OKX listing GPS perpetual contracts followed, prompting many to buy in large amounts, hoping to enjoy the "exchange new coin bonus" in a fluctuating and declining market.
However, the market quickly slapped those with such thoughts in the face, once again proving a truth—markets are always contrary to what most people imagine.
On March 6, according to Binance market data, the price of GPS fell to 0.059 USDT, over 60% down from its peak price (0.151 USDT) just two days after listing on Binance.
Many who bought GPS suffered heavy losses, not even witnessing the typical "Christmas tree K-line" left-side upward momentum before "enjoying" the complete right-side downward K-line trend that led to losses. Countless people vented their frustrations on platforms like X, WeChat groups, and TG groups, unable to understand why a new coin on Binance had no signs of a rebound and continued to decline.
Just when everyone was puzzled, Binance provided its investigation results—
On March 7, Binance added an observation label to GoPlus Security (GPS), indicating that the token had higher volatility and risk and was under observation and continuous review by Binance.
Subsequently, Binance's investigation results showed that the GPS market maker sold approximately 70 million GPS from March 4, 2025, 13:00 (UTC) to March 5, 2025, 9:55 (UTC) without placing any buy orders. After spot trading began, this market maker continued to sell GPS, becoming the largest profit-maker, earning about 5 million USD. Binance has launched an in-depth investigation into this incident and temporarily frozen the relevant market maker accounts.
As a result of this news, GPS briefly surged over 50%, rising to 0.063 USDT, with a 24H increase of 10.05%.
Meanwhile, the specific identity of the market maker behind GPS also sparked market speculation.
The Market Maker Behind GPS, Web3port: The "Shanghai Gang" Specializing in Exploiting Shanghai People?
On March 9, crypto KOL Kuai Dong was the first to reveal on X that: "The case is solved, the passive market maker for Myshell and GoPlus is GSR, and the active market maker is Web3port, a Shanghai team. All related Binance accounts should have been frozen. Web3port allocated tokens to its associated market maker Whisper, which executed continuous sell operations under internal permission on Web3port's Binance account, and that account has now been frozen by Binance. Multiple peers have confirmed that Web3port and Whisper belong to the same team."
He then disclosed again that the main decision-maker behind Web3port is May Liu, who was the founder of Spark Digital Capital based in Shanghai. Initially, she primarily operated under the VC banner for market outsourcing and attracting other VC institutions to take over projects for free tokens; later, she established the incubator Web3port and the market maker Whisper—the former mainly acquiring free token shares, while the latter provided a selling window for the free token shares in the name of providing market making for project parties.
It is worth mentioning that this news was soon retweeted by Binance co-founder CZ, further revealing the true culprit behind the GPS crash. CZ also commented: "The power of the community." It must be said that Binance has played a significant positive role in responding to community calls.
At the same time, the GPS market maker also affected another popular token in the BNB Chain ecosystem, SHELL.
On the 9th, Binance issued another announcement stating that during the investigation of a market maker for GoPlus Security (GPS), it found that the same market maker was also responsible for the market-making activities of the MyShell (SHELL) project. To better protect Binance users, Binance took the following additional measures against the improper behavior of this market maker:
· The market maker has been delisted and prohibited from conducting any further market-making activities on Binance;
· The relevant earnings of the market maker have been confiscated and will be used to compensate users of the GPS and SHELL projects (the detailed compensation plan will be determined and announced by the relevant project teams).
Additionally, according to insiders, the ACE token was also a product of Spark Digital Capital, which, after an early pump, similarly fell to around 0.7 USD recently.
Originally intended to provide liquidity for token projects, the market maker ultimately became the "ultimate scythe" that harvested investment institutions, project parties, and market retail investors in one direction, draining the entire industry and fattening itself. This incident has since become a hot topic of discussion among industry insiders.
Hot Debate: Market Maker Peers Clarify, Some Believe Market Makers are Industry Pests
The unseemly behavior of Web3port and related institutions Spark Digital Capital and Whisper has drawn disdain from industry insiders. Before their identities were exposed, well-known market maker DWF Labs officials also stepped forward to clarify, fearing they might "get into trouble for not getting a piece of the action."
DWF Labs Co-founder Clarifies: Not the Market Maker for GPS and SHELL
Previously, as the market maker identities for GPS and SHELL had not been strongly confirmed, there were speculations in the market that it might be DWF Labs.
In response, DWF co-founder Zac Zou promptly posted a response on X, stating, "DWF Labs is not the market maker (MM) for GPS and SHELL."
Manta Network Co-founder Critiques: Market Makers are All Pests
Regarding the recent market discussions about market makers, Manta Network co-founder Victor Ji stated: “We basically receive invitations every day from so-called active market makers and OTC for buying coins and acquisitions, and my attitude is to just stay away. In my eyes, whether active or passive, market makers are all blood-sucking pests. They do not consider the fundamentals of the projects at all, yet every time there’s a meeting, these people are very active in organizing events and attending conferences, and their bosses are wealthy. Why? Because this money comes from the project’s community. If in this industry, more and more funds do not pay attention to fundamentals, then the collapse of this industry will happen faster, and market makers are the most blatant group that ignores fundamentals. I believe that liquidity comes from real community trading; whether you are bullish or bearish, it’s a natural market. If market makers are willing to participate, they can buy coins in the market to gain positions.”
Conclusion: In the unregulated crypto industry, we can only hope for platforms to take action
This incident has once again exposed the characteristics of the crypto industry, such as the lack of an effective regulatory system. In the short term, behaviors like market makers only selling and not buying will still rely on exchange platforms for punishment, while project parties, whether actively or passively, become accomplices in similar incidents.
The likely outcome is a world where only retail investors get hurt. After all, even if there are corresponding compensation plans, it is often difficult to fully cover past trading losses. Perhaps in the future, there will be more comprehensive monitoring mechanisms that can ensure "industry wrongdoers" receive the punishment they deserve, rather than just temporary bans for specific incidents.
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