Binance has fired a staffer who uncovered evidence of market manipulation at crypto investment firm DWF Labs, one of the exchange's customers, the Wall Street Journal reported Thursday, according to past and current Binance employees. , citing documents, emails and interviews with other industry insiders.
Former staff members and their colleagues on Binance's market surveillance team are working to spot signs of market manipulation and other wrongdoing as part of the exchange's efforts to clean up Binance's practices in the face of financial regulators' scrutiny. was employed by.
According to the WSJ article, the team claims that “VIP” customers (those who trade more than $100 million a month) engage in pump-and-dump schemes and wash trading, which are prohibited by Binance's terms of service. It is said that he discovered.
DWF Labs, which generated more than $4 billion in monthly trading, emerged as a prolific investor in crypto projects in early 2023, at the center of a series of funding rounds in an otherwise calm market. . Unlike the traditional venture capital model, the company, whose founders made their money as high-frequency traders in cryptocurrencies, typically buys millions of dollars worth of a project's tokens at a discount, and when prices rise profited from.
Binance investigators filed a report alleging that DWF manipulated the prices of multiple tokens in 2023 behind a $300 million wash trade, but Binance determined there was insufficient evidence of market abuse. WSJ reported. According to the newspaper, the team manager was fired a week after submitting the report.
Binance told the Journal that the individual was terminated after an investigation found the allegations against the customer were “completely unsubstantiated” and rejected claims that he authorized market manipulation.
Binance also responded, regardless of staff layoffs. “We will not tolerate market abuse,” said X's post. “Over the past three years, we have offboarded approximately 355,000 users with over $2.5 trillion in transaction value for violating our terms of service.” The company did not respond to CoinDesk’s request for comment.
Updated (May 9, 11:15 UTC): Adding Binance's response in the last paragraph.
