Binance exchange has revealed the details of an internal case involving insider trading, exposing the misconduct of one of its employees.
This is the first time Binance has publicly disclosed a case of insider trading among its staff.
The case involves a former employee. They allegedly used insider information from a previous role at BNB Chain to gain an unfair advantage in token trading.
The employee recently joined the Binance Wallet team and is accused of using confidential information.
According to them, the employee used to execute a front-running trade ahead of a significant project’s token launch.
They state that the employee knew of a planned Token Generation Event (TGE) for a project called U DEX Platform.
The news was expected to attract significant interest from the crypto community.
Using this inside knowledge, the staff member allegedly purchased large volumes of the project’s tokens before the TGE was publicly announced. They sold them for a considerable profit once the tokens were released.
The incident came to light when Binance Wallet received a complaint. They alleged the employee had engaged in front-running using insider information.
This led the company to launch an internal investigation. Binance quickly identified the suspicious activity, and the employee was immediately suspended.
The company also emphasized that it would take further legal action if necessary. They’d also cooperate with relevant authorities to ensure justice is served.
Details of the Misconduct and Investigation
According to Binance Wallet’s statement on March 25, the employee in question had worked in a business development role at BNB Chain before joining the Binance Wallet team.
During this time, the employee allegedly accessed non-public information about the U DEX Platform’s token launch (UUU).
Knowing that the TGE would generate significant interest and potentially lead to a surge in token value. The employee is said to have used multiple linked wallet addresses to purchase a substantial amount of UUU tokens before the public announcement.
After the TGE was made public, the employee sold some tokens for significant profits. According to Binance, the employee executed “front-running.”
This refers to the illegal practice of executing orders based on non-public information that gives an unfair advantage over other market participants.
Binance Wallet emphasized that the employee’s actions violated company policy.
This was inconsistent with its commitment to maintaining fair trading practices and high ethical standards.
As part of its response, Binance suspended the employee and began a thorough internal review.
The company also announced that it would cooperate fully with the relevant authorities to take appropriate legal action against the individual involved.
Binance Exchange Rewards Whistleblowers
Binance has rewarded those who helped uncover the wrongdoing to encourage transparency and discourage unethical behavior.
The company announced it would distribute $100,000 among four anonymous whistleblowers who reported the misconduct.
Each whistleblower will receive an equal share of the reward. This is as Binance exchange continues to recognize the value of community involvement in rooting out fraud and unethical practices within the crypto industry.
Binance has made it clear that whistleblower reports should be submitted through its official whistleblowing email channel to protect the interests and identities of the individuals involved.
Binance’s decision to disclose this insider trading case comes amid ongoing efforts by the exchange to improve its internal compliance systems.
In a previous AMA (Ask Me Anything) session, Binance co-founder He Yi stated that the company had conducted internal reviews of over 120 employees in the past two years.
This is because more than 60 people have been terminated for violations of company policy.
The post Binance Exchange Reveals Insider Trading Case, Rewards Whistleblowers $100K appeared first on The Coin Republic.
The Coin Republic – Read More