The exchange has also inquired about the market makers’ information and their willingness to allocate up to 5% of their circulating tokens to Binance’s saving pools, in exchange of earning interest.
The world’s largest crypto exchange Binance is making some unconventional moves in order to boost the trading activity on the platform. Recently, the exchange contacted some crypto projects with low-liquidity tokens.
As per the market reports, this move seeks to enhance the “liquidity protection” on the platform. In an email to CoinDesk, the exchange said: “Over the past week, our team reached out to a small number of projects that issue digital assets listed on our platform as part of our ongoing risk management initiative. These projects have relatively lower market liquidity trading pairs and/or a smaller market capitalization, which potentially exposes users to risk, including potential market manipulation.”
The exchange has also inquired about the market makers’ information and their willingness to allocate up to 5% of their circulating tokens to Binance’s saving pools, in exchange for earning interest. The Block initially reported this development, and unverified screenshots displaying similar queries have been shared on X, the rebranded social media platform previously known as Twitter.
“The main purpose of our risk management outreach is to encourage project teams to take the recommended steps required to enhance their liquidity protection. Engaging market maker support is one way to enhance such protection,” the spokesperson further added.
Binance Is Losing Partners amid Regulatory Scrutiny
The recent regulatory crackdown has pushed crypto exchange Binance to its edge as the exchange tries to navigate through the regulatory changes. As a result of this crackdown, the BNB token price came crashing over the past month. The BNB price is already down by over 30% since the beginning of the year and is currently and is currently trading around $216 levels.
Earlier this week, some reports suggested that Binance was selling customers’ Bitcoin holdings to prevent the BNB price from falling further. However, Binance chief Changpeng Zhao has denied this calling this a mere FUD.
Amid the regulatory, Binance has been losing its key banking partners since the beginning of the year. In a recent development, payments giant MasterCard has announced the end of its partnership with Binance for a crypto card.
Starting from September 22, Mastercard will discontinue all four of its co-branded card initiatives with Binance in Argentina, Brazil, Colombia, and Bahrain, as outlined in an email statement from the credit card giant. In response, Binance communicated through a post on the X social platform, that less than 1% of users in Latin America and the Middle East will experience effects from this decision. However, it reassured that Binance accounts globally remain unaffected.
Mastercard clarified that other crypto card programs won’t be influenced by this decision. During the wind-down period, cardholders will have the opportunity to convert any holdings in their Binance wallets.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.