advertisement
Binance CEO Changpeng ‘CZ’ Zhao said the exchange has frozen $2 million associated with cryptocurrency addresses purported to be insider traders.
On Twitter on March 28th threadFatMan Terra said an anonymous individual had front-runned several Binance altcoin listings to book seven-figure profits. It detailed how the “covert operation” was exposed.
Insider allegedly made $1.4 million from insider trading
According to an article in January report FatMan Terra quoted 16 possible insider trading cases on Binance, where traders made a cumulative profit of $1.4 million.
In one of the cases, an insider bought Frax Share’s FXS on Uniswap in small batches over a period of 6 days, funding a wallet ‘0xd23’ with $53,000. Three days after his last purchase, the trader sold all his holdings and made a profit after Binance listed his FXS token.
In another case, a trader bought 131 Ethereum worth of Virtua (TVK) two days before it was listed on Binance. The trader earned 277 ETH from the sale of the token after its value rose.
The report cited similar deals where traders made substantial profits from various altcoin listings.
The traders’ identities remain unknown, but their trading patterns suggest they have inside information about these Binance listings.
Binance reaction
CZ confirmed FatMan Terra’s tweet, adding that the exchange had frozen the funds prior to his Twitter thread. CZ Added:
“We’re also constantly battling potential leaks and such. We’d appreciate it if you could continue to point them out. It helps us all.”
FatMan Terra also points out:
“Insider trading renders many profitable trades unprofitable (for example, an originally break-even trade may result in a 10% loss due to exploitative insider activity). Traders will never know what happened to them.”
Meanwhile, Binance Chief Strategy Officer Patrick Hillman previously said: Said The exchange “has an internal security team that monitors multiple platforms for possible employee trading activity, which is a zero-tolerance policy.”
