Binance has finally responded to accusations from online traders alleging that the exchange manipulated the market via Wintermute, offloading millions of SOL and ETH tokens.
In a recent communication shared by Binance’s customer support account, the exchange replied to a trader asking about on-chain data, indicating that its hot wallet “transferred” millions of Solana (SOL) and Ethereum (ETH) tokens on February 24. The trader alleged that the exchange was “dumping” tokens onto the market.
In reply, Binance refuted the claims of “selling off” or “disposing of” millions of tokens, asserting that many traders simply misinterpreted the on-chain transactions associated with Wintermute.
In a recent statement, Binance clarified, “As a trading platform, we only assist users in matching trades and do not have visibility into their choices, including those made by market makers who might adjust assets according to their strategies.”
The exchange cautioned traders against jumping to “rash conclusions” based on “trading screenshots” and urged them to recognize strategies that instill fear, uncertainty, and doubt (FUD) in the market.
Furthermore, Binance encouraged users to comprehend how market makers like Wintermute function to better understand their role in supplying liquidity.
Data from Arkham Intelligence indicates that on February 24, Binance transferred at least 103,570 SOL (valued at roughly $16.32 million at that time) and approximately 25,000 ETH (worth around $80 million) to market maker Wintermute. Many traders interpreted this as an indication that Binance was selling or offloading these tokens through Wintermute.
Investors and traders perceived this occurrence as a signal that Binance was bracing for market fluctuations, which could affect the liquidity and trading volume of SOL and ETH. Just a day later, the cryptocurrency market experienced a downturn, with Bitcoin’s price falling below $90,000, resulting in over $1 billion in liquidations.
During that period, traders accused Binance, Bybit, and other prominent centralized exchanges of “manipulating” the marketplace through extensive sell-offs and price controls. Nevertheless, there is presently no concrete evidence to validate these allegations.
In a link included in Binance’s reply, the exchange mentioned that it has established a market surveillance system to detect and prevent market manipulation, ensuring a “just trading atmosphere.”
What prompted Binance to transfer tokens to Wintermute?
Market makers are firms or organizations that supply liquidity by placing buy and sell orders, thereby narrowing the bid-ask spread and facilitating more seamless trading activities. They are essential in the cryptocurrency market as they can absorb significant orders, diminish price fluctuations, and aid in market stability.
Exchanges such as Binance usually partner with market makers by providing tokens as rewards or incentives to motivate them to consistently boost their inventory. In this manner, market makers like Wintermute can improve the platform’s liquidity.
An analyst noted on X that Binance is not offloading tokens to Wintermute; instead, Wintermute is drawing tokens from Binance’s reserves to sustain market liquidity. Disclosing the Enigmas of the MyShell Marketplace: A Whale’s $12.15 Million SHELL Extravaganza
