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Binance has suspended a member of its Binance Wallet team following an internal investigation into an alleged case of insider trading. The exchange initiated the investigation on March 23 after some reports highlighted suspicious operations by an employee of the company.
According to the preliminary investigation, the collaborator allegedly exploited confidential information to obtain illicit profits. The platform stated that further disciplinary or legal actions could be taken in collaboration with the competent authorities.
Summary
The accusations of insider trading against the Binance Wallet employee
The internal investigation began after Binance Wallet received a report about an employee allegedly conducting transactions in advance based on non-public information. Specifically, the collaborator – who joined the Binance Wallet team last month – allegedly used data obtained in a previous business development role at BNB Chain.
According to what was stated by the company, the employee was aware that a project was preparing a Token Generation Event (TGE) and that this event would likely attract great interest from the community. Having access to this information before it was made public, he would have purchased a significant amount of the token in question through interconnected wallets. After the official announcement, he would then have sold a portion of the tokens to obtain immediate gains.
Reactions of Binance and possible consequences
Following the preliminary conclusions of the investigation, Binance confirmed that it has immediately suspended the employee involved and that further investigations are underway to determine the appropriate disciplinary measures. The company also stated that it will cooperate with the authorities of the competent jurisdiction to assess any legal proceedings against the subject involved.
Although Binance has not publicly revealed the name of the employee, the discussion about the matter emerged on X (formerly Twitter), prompting the company to initiate the investigation.
Connections with a former manager of the BNB Chain
Some users on X have speculated about the identity of the employee involved. In particular, Freddie Ng, former operations manager at BNB Chain, has been mentioned, who appears to have joined the Binance Wallet team last month.
A user of X, known as “py,” highlighted that a specific wallet earned approximately 82,400 dollars from the U DEX Platform token (UUU). The blockchain analysis shows that this wallet would have received the tokens from another address originally funded by an account linked to “freddieng.bnb,” as Ng himself had publicly shared on his X profile.
The traces left on the blockchain indicate that a wallet presumably linked to the Binance employee liquidated the tokens a few minutes after the project’s public debut on March 23, when the token’s valuation peaked at 31.5 million dollars.
The role of informants in the case of insider trading on Binance
Binance acknowledged the contribution of the public in bringing the matter to light, but specified that it will only reward those who reported the case through the official whistleblowing channel, thus ensuring greater protection for whistleblowers.
To demonstrate its commitment to transparency and combating illegal activities, the company has announced a reward of 100,000 dollars equally divided among four anonymous whistleblowers who reported the issue through the designated email address.
The broader context and implications for the crypto sector
The case highlights a significant issue in the field of cryptocurrencies: the possibility that insider information is used for speculative purposes to the advantage of a few. Crypto platforms, including Binance, are already subject to increasingly stringent scrutiny by global regulatory authorities, who are seeking to prevent fraud, money laundering, and market manipulation.
This episode could intensify regulatory pressure on cryptocurrency exchange platforms, pushing companies in the sector to strengthen their internal mechanisms to prevent insider trading and other illicit activities.
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Conclusions
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Binance has taken immediate action in response to the accusations of insider trading against one of its employees, demonstrating a commitment to transparency and cooperation with the authorities. However, the case raises broader questions about the security and integrity of the cryptocurrency market.
While the investigation continues, the attention of the crypto community remains high: investors and regulators will continue to closely monitor Binance and its countermeasures to ensure a more fair and secure market.