Insider trading has become a hot topic in the crypto ecosystem, especially in light of the recent conviction of the brother of a former Coinbase manager. Insider trading allegations are believed to be the first involving cryptocurrencies, and now another set of wallet addresses with transaction history linked to the Binance listing has drawn suspicion.
Coinbase director Conor Grogan took to Twitter to flag the transaction activity of some anonymous wallets over the past 18 months. Anonymous wallets allegedly purchased multiple unlisted tokens minutes before the Binance listing announcement and dumped them immediately after the announcement.
According to Cointele Graph, The first such instance came in the form of the Rar token, where a wallet bought $900,000 of Rari seconds before and dumped it minutes after it was listed. Another wallet starting with 0x20 bought about 78,000 ERN between June 17-21 and sold it immediately after the listing announcement. A similar token dump was observed for TORN tokens, with one of the mentioned wallets buying hundreds of thousands of these tokens and selling them immediately after their listing announcement. Another $100,000 payday came from Binance’s listing of GNO, the same way wallet owners dumped newly listed tokens onto the market.
The post-listing token dump on Binance netted those wallets hundreds of thousands of dollars. The accuracy of the transactions suggests that wallet owners have access to insider information on these lists. Grogan speculates that this could come from “rogue employees connected to the listing team who would learn the details of a new asset announcement, or from a trader who discovered some sort of API or staging/test exchange exchange leak.”
Binance recently announced a 90-day token sale policy for employees, prohibiting them or their families from selling any newly listed tokens within the said time frame. Binance did not respond to Cointelegraph's request for comment.
