A Binance employer has been suspended over insider trading activities. Binance confirmed that it would cooperate with authorities in the employee’s jurisdiction to take legal actions.
By Godfrey Benjamin
Updated
3 mins read
Binance, the world’s largest crypto exchange, has suspended an employee following a major misconduct. An internal investigation found that the staff member was involved in insider trading.
Per the update, the individual took advantage of privileged information from a previous role to purchase tokens before a public announcement, making an unfair profit.
In a statement published on X by Binance Wallet, the exchange’s internal audit department was slammed with a complaint about suspicious trading activity connected to a recent token launch.
The exchange immediately launched a formal investigation, which confirmed that the employee had exploited non-public information for personal gain. As detailed by Binance, the unnamed individual previously worked in the Binance BNB Chain business development team. From here, the staffer was transferred to the Binance Wallet team in February.
It is worth mentioning that the Wallet team had no direct access to details about the project. The trading platform said the employee had prior knowledge from their former position.
The platform indicated that the staff member used several connected wallets to secretly buy many unreleased Binance tokens before their public release. After the exchange announced the token and it started gaining attention, the employee quickly sold part of their holdings to make a big profit.
Meanwhile, the remaining tokens remained in their possession, with substantial unrealized gains.
In the X statement, Binance classified this act as front-running, a clear violation of company policy. As announced, the estranged employee was immediately suspended, with further disciplinary action pending.
Binance confirmed that it would cooperate with authorities in the employee’s jurisdiction to take further legal actions. The company also stated that any assets tied to the misconduct would be dealt with in compliance with financial regulations.
Binance made it clear that it does not tolerate market manipulation and assured users that it is committed to fair and transparent trading.
To avoid repeating history, Binance told its community that it would establish stronger rules to closely monitor employee activities. The trading platform added that it would modify its policies on employee conduct as it recognized the role of whistleblowers in uncovering the misconduct.
The company has completed the verification process for valid reports and rewards those who flagged the incident through official channels.
Insider trading remains a major challenge in cryptocurrency, where transparency is crucial to maintaining investor trust.
For years, insider trading has been a concerning issue for cryptocurrency companies.
Many employees of various crypto entities have looked for different ways to illicitly profit from privileged information.
For instance, in 2023, as reported by Coinspeaker, a former Coinbase product manager, Ishan Wahi, was convicted for leaking confidential token listing information to his associates, leading to illegal profits.
Following suspicious trading activity during Venice’s VVV token launch in January, Aerodrome Finance took immediate action by suspending two contributors due to insider trading allegations.
Meanwhile, some community members and influencers have expressed their support for Binance, praising the exchange’s handling of the issue.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.