Paid to stand on both sides
Who buys your USDC when you sell it on an exchange? It may be a firm whose job is to quote both sides all day, paid by the exchange to do so. Exchange Kraken’s liquidity provider program, read on November 10, 2026, advertises “Maker rebates up to 0.020%”, with one tier setting a firm’s rates on spot, futures and tokenized stocks alike.
The program has five tiers. A firm’s tier depends mainly on its maker volume as a share of the exchange’s, measured over a rolling 30 days, the page says, with zero maker fees at the first tier, LP 1, and rebates from LP 2. Tier changes take effect at 00:00 UTC the next day.
None of that shows on the screen you trade from. Kraken’s pre-trade feed counted 17 orders at the best USDC/EUR bid at 10:13 UTC that morning, and like any public order book it shows prices and sizes but never names.
How the law defines the role
The SEC’s investor glossary calls a market maker “a firm that stands ready to buy or sell a stock at publicly quoted prices.” EU securities law is tighter. Article 4(1)(7) of MiFID II describes a person who holds himself out “on a continuous basis as being willing to deal on own account”, buying and selling against its own capital at prices it sets.
MiCA, the EU’s crypto rulebook, has no definition of its own, but it keeps exchanges out of the role on their own venues. Article 76(5) of MiCA bars a firm operating a crypto trading platform from dealing on own account there. Article 76(6) allows matched principal trading only where the client has agreed to it.
When the title is a cover
The name proves nothing. On October 9, 2024, the SEC announced fraud charges against three companies “purporting to be market makers”, ZM Quant, Gotbit and CLS Global, along with nine individuals. Token promoters, it alleged, hired the firms for “market-manipulation-as-a-service.”
According to the SEC’s complaints, the firms traded with themselves, the practice known as wash trading, using bots that at times “generated quadrillions of transactions and billions of dollars of artificial trading volume each day.” One of the tokens had been created at the direction of the FBI as part of its own investigation.
In the EU the same conduct falls under Article 91 of MiCA, which bans orders that give “false or misleading signals as to the supply of, demand for, or price of” a crypto-asset. Kraken’s trading rules list wash trading, layering and spoofing among the practices it prohibits.
When a small token shows heavy volume, look at how much is actually bid near the price before counting on a buyer, a test that real liquidity passes and wash-traded volume fails.