Binance Investigates Employee Trading Violation
Cryptocurrency exchange Binance announced on Tuesday the results of its investigation into an employee trading violation, stating that it has suspended an employee suspected of engaging in front-running trades using insider information.
According to the announcement, Binance recently received reports alleging that an employee used insider information to conduct front-running trades and obtain illicit gains. The investigation revealed that the employee, who worked in the Binance wallet team, leveraged information from their previous position in the BNB Chain business unit and their understanding of on-chain projects to learn that a particular project was set to issue tokens via a Token Generation Event (TGE). They assessed that the project could generate community interest, leading them to purchase a large number of tokens through multiple associated wallet addresses before the project’s token launch announcement, and then quickly sold a portion of the tokens after the announcement to realize substantial profits.
Binance stated that the employee’s actions constituted front-running based on relevant information from their past position, which severely violated company regulations. The exchange also clarified that this case did not involve insider trading within the Binance wallet, noting that although the violating employee was part of the wallet team, “the wallet team had no collaboration with the project in question, and had no access to any non-public information related to the project.”
Binance indicated that the involved employee has been suspended and that the company will proactively contact and cooperate with the relevant authorities in the employee’s jurisdiction to pursue legal accountability. Relevant assets will also be handled in accordance with applicable regulations. Additionally, Binance announced that it will reward four whistleblowers who provided information through official reporting channels with a total of $100,000.
Although Binance did not disclose the name of the related cryptocurrency project, several users on X claimed it might be linked to the trading platform uDEX on the BNB Chain.
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