Binance suspends employee for allegedly profiting off of insider information
Quick Take
- Binance Wallet announced that it has suspended an employee for allegedly using insider information to sell tokens for significant profits before the project launched its TGE.
- Binance said the employee used information from this previous BD role at BNB Chain.
Crypto exchange Binance has suspended an employee for allegedly using insider information on a crypto project to gain unfair profits.
According to its X post on Tuesday, a staff member of the Binance Wallet team purchased a significant amount of a token project that he knew would soon hold a Token Generation Event, and sold part of his holdings to gain significant profits.
The employee exploited privileged information he had gained from his previous business development role at BNB Chain, said Binance, clarifying that the Wallet team itself would not have access to private information relating to the project.
"This behavior constitutes front-running based on non-public information obtained from his previous role and is a clear breach of company policy," Binance said. "As a result of this behavior, the staff member was suspended immediately and pending further disciplinary action."
While Binance did not reveal the name of the crypto project, multiple users on X pointed out that the project in question is Binance Smart Chain memecoin UUU (U DEX Platform) token.
X user "pycharts" posted a screenshot that appears to show a wallet address selling over 6 million UUU tokens at around 7 a.m. on March 23, causing the token price to crash significantly. The X user's screenshots linked the wallet address to Freddie Ng, an employee of Binance Wallet's BD and Growth team.
In response to pychart's X post, Binance's official Chinese language account wrote that it has noticed the "feedback" and has launched an internal investigation, the result of which would be announced to the public in a timely manner.
Meanwhile, the global exchange said in today's statement that it will "proactively cooperate" with the relevant authorities in the staff member's jurisdiction and seek legal action with applicable laws.
Binance also announced that it will distribute a reward of $100,000 to four whistleblowers who reported the alleged violation to its official whistleblowing channel.
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