Global cryptocurrency exchange Binance is under scrutiny for insider trading as reportedly a list of transactions revealed token dumps just after Binance listed certain coins.
Conor Grogan, director of Coinbase, stated that “there is a pattern of Binance front-running over 18+ months,” by noting certain transactions.
Grogan stated the situation of Rar tokens where one of the wallets bought $900,000 in Rari seconds before and dumped them minutes after listing in Binance.
Last week, an anonymous wallet address bought 6193.46 RPL 10 minutes before Binance released the Rocket Pool (RPL) listing announcement, and sold them all 10 minutes after the announcement, making a profit of $55,400.
Another address also spent 188,000 USDC to purchase 5,353 RPL within 30 seconds of Binance’s announcement, setting a high slippage to achieve fast transactions, and gaining a profit is about $15,000.
One of these wallets bought around 78,000 ERN between June 17 and June 21 and sold right after the listing announcement in Binance, and the same appended with TORN tokens.
The Coinbase director suspects that this event was orchestrated likely by a rogue employee connected to the listings team who would have details on new asset announcements or a trader who found some sort of API or staging /test trade exchange leak.
Before the RAMP token’s debut on Binance, one of these wallets acquired $500,000 worth of RAMP, before transferring the tokens to Binance minutes after the listing announcement and generating a $100,000 profit on the transaction.
The owner of the wallet made another $100,000 from Binance’s GNO listing by immediately dumping the freshly listed coin on the market. The accuracy of the trade suggests that the owner of the wallet has access to knowledge about these listings.
Two weeks back, reports came in that every Binance employee is subject to a 90-day hold on any investments they make, and Binance’s leaders are mandated to report any trading activity on a quarterly basis. In September 2021, US authorities were investigating Binance for insider trading, causing a commotion in the community.
Last September, Nikhil Wahi pleaded guilty to insider trading using confidential information regarding which crypto assets were planned for listing on Coinbase. His brother, Ishan Wahi had access to confidential data regarding the timing of public bulletins about the crypto asset listings.