thecryptobasic.com
Prominent crypto exchange Binance has suspended a staff member for alleged involvement in insider trading related to a newly launched meme coin.
In a Tuesday X post, Binance Wallet announced the suspension of an employee who allegedly used privileged information to profit from a new token launch. The prominent exchange stated it would pursue other legal action against the staff member in cooperation with local law enforcement authorities.
Specifically, the employee leveraged non-public information about a BNB Chain-based token set for its Token Generation Event (TGE) and front-ran its launch. Using multiple wallets, the staff member acquired a significant portion of the token’s supply and generated staggering gains from the position.
Employee Exploits Connections with BNB Chain
Earlier speculations alleged that the scheme came from the Binance Wallet team, where the employee worked before his suspension. However, the leading trading platform clarified that although he works there, the Wallet staff does not have access to such insider information.
Meanwhile, the staff member moved to the Wallet department a month ago from his former role as a business developer at the BNB Chain. Hence, he utilized privileged information from his old position to attain private information about the token, including its TGE plans.
Before the launch, data shows the employee spent $6,227 to acquire 24.1 million of the meme coin identified as UUU, about 2.4% of its total supply. Interestingly, he cashed out $113,000 shortly after the token’s market debut and had $200,000 in unrealized profits at one time.
Unfortunately, the scandal around the UUU token has pushed its price sideways, with the asset dropping over 36% from its high of $0.0149 to the current price of $0.009425.
Whistleblowers Net $100k Reward
Interestingly, the unfortunate situation benefitted whistleblowers, who netted $100,000 for providing relevant information to Binance. The exchange announced the reward for four email addresses, which it chose to keep anonymous, who submitted valid reports through its official whistleblowing channel and aided the investigation.
Binance noted that while some users shared evidence of the insider trading on X (formerly Twitter), it only formally acknowledged those shared through the platform. This, the exchange noted, was to protect the interests of the whistleblowers.
Notably, Binance has maintained a strict policy against insider trading among staff. It recently conducted a thorough investigation when reports emerged that an employee allegedly used privileged information to trade the BOME token but found the speculations false.