World's Largest Exchange Delists Market Maker Over $38M Profit Controversy

Market makers play a crucial role in the crypto ecosystem by providing liquidity, ensuring efficient trading, and preventing excessive price volatility. They continuously place buy and sell orders, which helps traders execute transactions without significant price fluctuations. Without market makers, liquidity would be lower, spreads would be wider, and price slippage would be more severe, making trading riskier. Exchanges like the world’s largest exchange by trading volume metrics run dedicated programs to incentivize market makers, rewarding them for maintaining high liquidity and preventing projects from falling below exchange requirements, potentially avoiding delisting.

However, recent controversies surrounding market makers have raised concerns about whether they are acting as stabilizing forces or exploiting their position for massive profits at the expense of retail investors. The Web3port controversy is a case in point. Web3port, a market maker, is linked to multiple projects on the world’s largest exchange by trading volume metrics, including GoPlus Security, Myshell, and Movement. Crypto analyst Jason Chen alleged that Web3port amassed an astonishing $38 million in profits from just one project while retail investors suffered major losses. Chen stated that this profitability is too exaggerated, with the entire crypto circle working for market makers. The controversy escalated when the world’s largest exchange by trading volume metrics took action against Web3port’s market-making activities.

The world’s largest exchange by trading volume metrics disclosed that a market maker for the Movement project engaged in suspicious trading. Specifically, it dumped 66 million MOVE tokens a day after launch while placing few buy orders. This resulted in sharp price declines that harmed retail investors. As a result, the world’s largest exchange by trading volume metrics froze the market maker’s earnings and delisted it from the platform. It also required the MOVE project to compensate affected users. Chen added that it feels like the world’s largest exchange by trading volume metrics is now sharpening its knife to attack market makers, killing big players and dividing land.

Despite the world’s largest exchange by trading volume metrics’ recent crackdown on rogue market makers, questions remain about why the exchange took four months to address these issues. A respected blockchain journalist noted that while tens of millions of dollars worth of tokens were offloaded in December 2024, the world’s largest exchange by trading volume metrics only publicly addressed the misconduct in March 2025. Some speculate that the world’s largest exchange by trading volume metrics may have benefited from the heightened trading activity caused by these market makers. Higher volatility increases trading volumes, generating more fee revenue for exchanges. The journalist questioned whether the world’s largest exchange by trading volume metrics knew these irregularities but only acted when scrutiny intensified.

The world’s largest exchange by trading volume metrics has a history of market-making controversies, including a lawsuit from the regulator. The regulator accused the exchange of facilitating wash trading through market maker Sigma Chain. This case resulted in the world’s largest exchange by trading volume metrics paying a fine. Given the regulatory crackdown, the world’s largest exchange by trading volume metrics’ recent actions against Web3port and others might be an effort to clean up its operations and avoid further legal troubles. Elsewhere, market makers have also been implicated in the collapse of major projects. Speculation has it that a large market maker contributed to the downfall of Terraform Labs. The depegging of Terra’s UST stablecoin in 2022 was allegedly linked to coordinated sell-offs, raising concerns about the unchecked power of market makers in the crypto space.

While market makers are essential for liquidity, their ability to manipulate prices and amass massive profits raises ethical concerns. Are they stabilizers of the market or hidden manipulators extracting profits at the expense of unsuspecting traders? The Web3port controversy highlights the need for greater transparency and regulation in the crypto market-making industry to protect retail investors and maintain market integrity.