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Binance has refuted claims of insider trading involvement associated with Solana memecoin sensation BOOK OF MEME (BOME).
The emergence and listing of BOME over the past week came with notable controversy. On-chain analytics platform Lookonchain raised an alarm showing a Binance trader withdrew 12,721 SOL ($2.3 million). This trader then injected this fund to buy the equivalent of 314 million BOME at an average price of $0.0074.
Lookonchain flagged this transaction as it was initiated just before Binance listed the memecoin for trading. The community swiftly assumed that an insider might be linked to the trade.
The Binance Investigation and Discovery
With its reputation on the line, Binance said it launched an investigation into the alleged unwholesome practice. Per its findings, the exchange confirmed that the trader who withdrew the 12,721 SOL is not on its payroll.
“Upon receiving information about the large BOME transaction, we immediately initiated an internal investigation, and the results showed that the user is not a member of Binance staff,” Binance said in its brief on X.
Insider Trading is a serious offense that often draws prosecution from market regulators. The crypto industry has a major insider trading legal precedent involving former Coinbase Product Manager Ishan Wahi. Ishan connived with his brother to commit insider trading offenses and was charged in court.
In a bid to assure its community, Binance said its investigative team will continue to dig deep into the alleged misconduct.
While it has no established whistleblower policy, Binance said it is “offering a reward of 100,000 USD ~ 5 million USD to any users that report fact-listing-related or other fraudulent behaviour.”
Upon receiving information about the large BOME transaction, we immediately initiated an internal investigation, and the results showed that the user is not a member of Binance staff.
Transparency is a top priority at Binance, and our investigations team will continue to look…
— Binance Customer Support (@BinanceHelpDesk) March 18, 2024
Memecoin Season On Solana
The Solana ecosystem has taken center stage in the current market cycle, with multiple developers taking advantage of the hype surrounding it to launch new memecoins.
Besides BOME, Solana has seen an explosion of memecoins over the past few months with dogwifhat (WIF) and SLERF among the most popular.
Interestingly, the SLERF creator revealed today that he mistakenly burnt $10 million worth of Liquidity Provider (LP) tokens raised through Presale, a case that underscores how fragile and unsafe the meme market is.