The CEO of Binance, Changpeng Zhao, reacted to a Twitter discussion citing 16 instances of insider trading on Binance.
Many incidents of insider trading impacting Binance were described in a Twitter thread published by cryptocurrency enthusiast and expert Fatman (@FatManTerra) on March 28. This thread focuses on a fictitious person who engaged in frontrunning pumps of various cryptocurrencies on Binance and made a seven-figure profit.
After receiving $53,000, the wallet 0xd23 purchased little amounts of FXS on Uniswap between transactions. The FXS token was published on the Binance market three days later, which resulted in significant price increases.
The investors made money by sending tokens to Binance.
The same trader's 0x51 wallet purchased around 131 ETH of TVK. A few days later, TVK was listed on Binance, which led to a rise in price. The trader received about 277 ETH in payment.
Only two incidents were discussed in the thread. Yet, it raised attention to a January piece that detailed 16 instances of insider trading on Binance.
According to estimates, the total gains realized in the cases came to close to $1.4 million. The insider trader may or may not be related to Binance, but he had access to inside information.
Changpeng Zhao replied to the tweet by saying that they have located the location and the roughly $2 million connected to it. The CEO observed that once the account was frozen, the owner never requested its return.
Thank you for pointing this out. We had frozen $2m associated with the address in question before your thread (and they never asked to re-claim). We are also always fighting potential leaks, etc. We welcome you to point them out in the future too. Helps all of us.
— CZ 🔶 Binance (@cz_binance) March 29, 2023
Zhao also said that the exchange works hard to prevent dangers that might result in insider trading. In the future, he asked people to assist in pointing out similar occurrences.
For regular investors, insider trading might result in certain issues and a loss of gains. Moreover, such illicit trading may render some otherwise lucrative markets unprofitable.
The exchange is being sued by the CFTC as the insider trading allegations come to light.
