coinpedia.org
Binance, a cryptocurrency exchange that holds over 536,274 Bitcoins in its balance, has experienced significant regulatory upheavals in the recent past. However, the firm has remained determined to push cryptocurrency adoption globally amid rising inflation. Moreover, the company is trusted by over 120 million registered users from all over the world.
Following the collapse of FTX and Alameda Research late last year, United States financial regulators, including the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), have intensified their crackdown on cryptocurrency-related companies. For instance, the CFTC charged Binance.US and CEO Changpeng Zhao (CZ) for operating “illegally” in the United States and helping residents evade set regulations.
Binance Defense in Action
According to a report by Twitter user @FatManTerra, an anonymous individual front-ran Binance listing pumps and bagged 7-figure profits. A report by Overlords on medium outlined 16 instances of potential Binance insider trading with a net profit of about $1.4 million.
Among the mentioned crypto projects that were affected by insider trading include Frax Share (FXS) and MANTRA DAO, among many others. According to on-chain data, the anonymous Binance insider trader spaced the transactions to avoid detection. For instance, the anonymous Binance insider trader purchased FXS in six days from Uniswap before the listing was announced.
Our story begins with the 0xd23 wallet – an address that is freshly funded with $53,000, and immediately starts buying FXS on Uniswap. The transactions are spaced out in smaller batches to avoid slippage and detection. The small buys continue for 6 days. (2/9) pic.twitter.com/8RXKhs3qWf
— FatMan (@FatManTerra) March 28, 2023
In another instance, the Binance insider trader purchased 131 Ether of TVK two days before the official listing. The trader then sold all the TVK after listing and cashed out 277 ETH. The effects of insider trading on the token listing are mainly suppressing tokens’ upward volatility at the expense of retail traders.
In response to the report, Binance’s CZ noted that the exchange froze $2 million associated with the anonymous insider trader.
Thank you for pointing this out. We had frozen $2m associated with the address in question before your thread (and they never asked to re-claim). We are also always fighting potential leaks, etc. We welcome you to point them out in the future too. Helps all of us.
— CZ 🔶 Binance (@cz_binance) March 29, 2023