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Binance has suspended one of its staff after uncovering evidence of insider trading linked to a recent token launch.
In a recent X post, the exchange said it began its internal investigation on March 23, following a community tip-off about unusual trading activity, and the accused was “suspended immediately.”
In the crypto space, insider trading refers to the act of using confidential, non-public information about a token, such as an upcoming listing or launch, to pre-plan trades before the information is made public.
This allows the bad actor to gain an unfair advantage, often resulting in significant profits at the expense of regular investors.
The practice is widely considered unethical and, in many jurisdictions, illegal.
What happened?
Binance said the staff member at the centre of the investigation had recently joined its Wallet team but previously worked at BNB Chain.
The exchange believes the employee may have used information from that former role to anticipate a project’s Token Generation Event (TGE), expecting it would draw significant community attention.
According to the exchange, the staffer used several connected wallets to quietly accumulate a large stash of tokens before the project was made public.
Once the announcement went live, some of those holdings were quickly sold off for a sizable profit.
Following a three-day investigation that began after social media allegations began to surface, the accused has been suspended and awaits disciplinary action.
The exchange said it would “cooperate with the relevant authorities in the employee’s jurisdiction and take appropriate legal action.”
Binance will also ensure that any assets involved are dealt with according to legal requirements.
Although the staff member involved has not been named in the official report, community members have been pointing fingers at Freddie Ng, a former BNB Chain operations manager who transitioned to the Binance Wallet business development team roughly a month ago.
Multiple users have flagged that wallets linked to Ng were tied to suspicious trades, particularly involving the UUU token from the U DEX Platform.
According to on-chain data shared by one X user, a wallet that made $82,400 in profits from trading UUU tokens was funded by another wallet, which in turn received funds from an address linked to “freddieng.bnb.”
That ENS domain had previously been shared by Ng on his X account, prompting further suspicion from the community.
As of publication, Ng hasn’t responded to any of the allegations.
Meanwhile, Binance has thanked the community for bringing the issue to light and said it had completed a review of all valid whistleblower submissions.
The exchange has offered a $100,000 reward that will be equally distributed among four anonymous whistleblowers who submitted their reports through Binance’s official audit channel.
A persistent problem in the industry
Insider trading continues to plague the crypto space, challenging the ideals of fairness and openness the industry was built on.
As previously reported by Invezz, similar concerns have emerged around STAR10, a token launched by football legend Ronaldinho on March 3. STAR10 quickly surged over 20% after launch, drawing heavy investor interest.
However, blockchain analytics firm Nansen flagged an insider wallet linked to Ronaldinho that reportedly turned an initial $29,000 worth of BNB into nearly $4.95 million.
Investigations found the wallet offloaded a small portion of tokens while retaining over 20 million, sparking allegations of pre-planned profit-taking.
Another such token is LIBRA, which has also faced similar allegations.
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