The world’s largest cryptocurrency exchange by trading volume, Binance, has gotten in touch with various projects that have tokens with low liquidity in an effort to “enhance their liquidity protection.”
“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,” a spokesperson revealed via an email. “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.”
According to The Block, which first reported the story, the exchange has requested information regarding the projects’ market makers and if they would be open to contributing up to 5% of their circulating tokens to Binance saving pools in exchange for interest.Unverified screenshots published on X, the social media network formerly known as Twitter, indicate similar requests.
“The main purpose of our risk management outreach is to encourage project teams to take the recommended steps required to enhance their liquidity protection,” the spokesperson said. “Engaging market maker support is one way to enhance such protection.”