Crypto market makers rake in cash shorting their customers’ tokens. One firm is calling for more transparency. “Market making in general has a very negative perception,” Wesley Pryor, founder of market-making firm Acheron Trading, told DL News. “It’s viewed as predatory. But really, market making is one of the most critical components for the digital asset ecosystem to actually operate.”

DL News reports that major crypto market-making firms are generating substantial profits by shorting the very tokens issued by the projects that hire them, intensifying long‑standing concerns that market makers can act against their clients’ interests. Shorting is often defended as a standard risk‑management tool that helps firms stay delta‑neutral—hedged against price moves—while they provide liquidity across venues. However, Wesley Pryor, founder of market maker Acheron Trading, argues that in practice many firms prioritise “parasitic” strategies that maximise their own PnL over liquidity and price stability, and that some systematically short client tokens rather than focusing on reducing volatility and improving market depth. This behaviour has contributed to a negative public perception that market makers manipulate markets, exploit information advantages, and profit during downturns in the same assets they are paid to support. According to the article, the core structural issue lies in how most token‑market‑making deals are designed, particularly the prevalent “loan and call option” model. Under this model, a project lends tokens to a market maker and grants it a call option, allowing the firm to buy those tokens at a preset price at the end of the term. If the token underperforms, the market maker can simply return tokens and still profit from shorting or other directional strategies executed during the contract, while the project is left with weak price performance and damaged market confidence. Pryor contends that this setup misaligns incentives and encourages opaque, profit‑driven trading rather than genuine liquidity provision. In response, Acheron Trading is positioning itself as a counter‑example by pushing for greater transparency and more client‑friendly structures. Pryor says Acheron shares real‑time liquidity performance indicators with token issuers, avoids strict nondisclosure agreements around contract terms, and proposes more flexible agreements that allow projects to exit if performance is poor. The firm wants market making to be evaluated on measurable liquidity outcomes—such as spreads, depth, and execution quality—rather than opaque volume metrics or headline “support.” Not all industry leaders agree: Wintermute CEO Evgeny Gaevoy, for example, is cited as defending market makers’ right to operate privately, arguing that full transparency is neither necessary nor always desirable. The debate highlights a broader tension in crypto market structure between efficiency and opacity: market makers are critical to functioning token markets, but without clearer norms on disclosure and incentives, suspicions about conflicts of interest and predatory practices are likely to persist.

✨ AI-generated background, compiled from web sources — not editorial content.

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