What is a crypto market maker and what do they do?

A crypto market maker is a trading firm that continuously offers to buy and sell a coin, so other traders always have someone to trade with. By keeping orders on both sides of an exchange's order book, market makers narrow spreads and add depth. Most are private companies, and the industry is far less regulated than market making in stocks.

What does a crypto market maker do?

A market maker quotes a bid price and an ask price for a trading pair and stands ready to take the other side of trades. The Block's explainer says they earn income from the spread between buying and selling prices, and that competition between market makers tends to narrow that spread. Exchanges value them because tighter spreads and deeper books attract traders. That extra liquidity makes smaller tokens easier to trade without big price jumps.

Some market makers also handle large private trades, which overlaps with the work of an OTC desk.

How do market maker loan deals work at a token launch?

New token projects often sign a market maker before listing. Market maker Flowdesk describes two common models. In a loan and call option deal, the project lends the market maker part of its token supply and grants an option to buy those tokens at a pre-agreed strike price. The market maker returns the tokens or exercises the option if the price rises above the strike. In a retainer deal, the project lends both tokens and cash such as USDC and pays a monthly fee.

Flowdesk notes that crypto market making is largely unregulated, so firms set their own terms, and it lists guaranteed price targets and weak transparency as red flags. Option deals can create a conflict, because a market maker holding borrowed tokens may profit from selling them.

Have crypto market makers been charged with fraud?

Yes. On October 9, 2024, federal prosecutors in Boston charged 18 people and companies, including four firms described as market makers: Gotbit, ZM Quant, CLS Global and MyTrade MM. The FBI created its own token, NexFundAI, to catch firms offering fake trading. Prosecutors said clients paid market makers to run wash trades, where the same party buys and sells to fake activity, before insiders sold at inflated prices in a pump and dump. More than $25 million in crypto was seized.

The SEC alleged Gotbit sold market manipulation as a service, with a bot at times generating over $1 million a day in artificial volume. Gotbit's founder was sentenced in June 2025 to eight months in prison, and the firm agreed to forfeit about $23 million.

Who is the biggest crypto market maker?

There is no official ranking. Firms such as Wintermute are widely described as market makers, but most are private and do not publish audited trading volumes, so any "biggest" list is an estimate. Their positions and activity can also shift quickly as markets change.