Binance recently replied to a trader who asked about the on-chain data that displayed Binance’s hot wallet “sending” millions of Solana and Ethereum tokens from its holdings on February 24.
The Binance Customer Support account shared the reply. The trader charged the offloading of the tokens with “dumping on everyone.”
Binance Denies Tokens for “Sales” In Wintermute Exchange
Binance recently replied to a trader who asked about the on-chain data. The data displayed Binance’s hot wallet “sending” millions of Solana and Ethereum tokens from its holdings on February 24. The Binance Customer Support account shared the reply. The trader charged the offloading of the tokens with “dumping on everyone.”
In a recent post, Binance explained: “As an exchange, we simply help users match trades. We have no visibility into our users’ decisions. This includes market makers who may move their assets according to their strategies.
The exchange told traders not to “jump to conclusions about screenshots of transactions” and that they should learn to identify strategies that may inspire fear, about uncertainty and doubt or FUD in the market.
Additionally, Binance also advised its customers to educate themselves about the operations of market makers such as Wintermute to help with liquidity; they should learn more about how they work.
Data on Arkham Intelligence, which was revealed on February 24, showed that Binance moved at least 103,570 SOL ($16.32 million at the time) and about 25,000 ETH ($80 million) to market maker Wintermute.
Many traders thought that the data meant that Binance was selling or dumping these tokens from their crypto holdings through Wintermute.
The event was seen by traders and investors as evidence that Binance was getting prepared for market volatility,
This might affect trading volumes and liquidity for ETH and SOL. The crypto market crashed the next day when Bitcoin’s price fell below $90,000. This episode led to the loss of over $1 billion.
Traders accused Binance, Bybit, and other large centralized exchanges of manipulating the market through massive sell-offs and setting price limits. However, there is no solid evidence to back up these claims.
Why did Binance give Wintermute Tokens?
Market makers are firms or entities that specialize in offering liquidity in the crypto market by placing buy and sell orders.
This method reduces the difference between the bid and ask prices and makes trading smoother.
Since they take in significant orders, lower prices, and help maintain market stability, market makers play a significant role in the crypto scene.
Binance often gives market makers tokens to keep them adding stock. By doing this, Wintermute and other market makers can make the platform more liquid.
In a link Binance shared with its response, the exchange claimed to have a market surveillance program on its platform. This program seeks to identify and stop market manipulation. It aims to maintain “a fair trading environment.
