Binance, one of the world’s leading cryptocurrency exchanges, announced that it had frozen $2 million from an alleged insider trader. The announcement came from the CEO of Binance, Changpeng ‘CZ’ Zhao, in a March 28 Twitter thread initiated by FatMan Terra. The crypto influencer had detailed the anonymous trader’s “covert operations” in which the person front-ran several Binance altcoin listings to book a seven-figure profit. Reportedly, the trader had made a cumulative profit of $1.4 million from 16 possible instances of insider trading.
In one case, the trader bought Frax Share’s FXS on Uniswap over six days in several small batches after initially funding a wallet with $53,000. They then sold off all their holdings at a nice profit after Binance listed the FXS token three days after their last purchase. Another example revolved around Virtua (TVK) where the trader bought 131 Ethereum worth of the token two days before it was listed on Binance. As the coin’s value rose upon listing, they were able to gain 277 ETH. Due to similar types of activities, it is assumed that the trader has inside information relating to these Binance listings.
CZ confirmed FatMan Terra’s tweet, adding that the exchange had frozen the funds prior to the tweet. He further encouraged the community to point out any potential leaks in the future, showing that Binance values the community’s contribution in better securing their exchange.
Binance’s Chief Strategy Officer Patrick Hillman disclosed that the exchange has an internal security team devoted to monitoring employee trading activity and has a zero-tolerance policy for insider trading. FatMan Terra pointed out that such activities make profitable trades to become unprofitable for other people due to the insider’s actions, and the affected traders might never be aware of what occurred.
It is commendable that Binance is taking precautions to ensure a secure and fair trading environment for all traders. With their strong stance on the issue, it reinforces their commitment to market integrity and trust.
Noah Davis
- 2023-03-30
Binance Stops $2 Million from Insider Trading
Binance, one of the world’s leading cryptocurrency exchanges, announced that it had frozen $2 million from an alleged insider trader. Binance’s Chief Strategy Officer Patrick Hillman disclosed that the exchange has an internal security team devoted to monitoring employee trading activity and has a zero-tolerance policy for insider trading.
