Crypto exchange Binance has suspended a member of its Binance Wallet team, adding it could take further legal action after launching an internal investigation over allegations of insider trading.
The exchangeโs crypto wallet business, Binance Wallet, launched an investigation on March 23 after it โreceived a complaint alleging that one of our staff members engaged in front-running trades using insider information to gain improper profits,โ it said in a March 25 X post.
It claimed a preliminary investigation found a Binance Wallet staffer who joined the team last month was suspected of using information from a former position in a business development role at BNB Chain to โfront-runโ trades of a project token.ย
โThe employee was aware the project was planning a Token Generation Event (TGE) and anticipated it would generate significant community interest,โ Binance Wallet wrote.
It claimed the staffer โused multiple linked wallet addresses to purchase a large volume of the projectโs tokensโ before it publicly announced the token launch and then, after the announcement, โquickly sold part of his holdings to realize significant profits.โ
Binance Wallet accused the staff member of front-running trades based on non-public information gained from a previous role in breach of company policy.ย
It added the staff member was โsuspended immediately and pending further disciplinary action,โ and the company would cooperate with authorities in the relevant jurisdiction to take legal action.
The company did not name the staff member but noted the allegations circulating on X prompted the investigation.
Earlier this week, multiple X users pointed to a former operations manager at BNB Chain โ Freddie Ng โ whose LinkedIn shows he joined Binance Walletโs business development team last month.
As noted by X user โpy,โ one of the wallets that DEX Screener shows has profited $82,400 from the token in question, U DEX Platform (UUU), is a wallet that received UUU tokens from another wallet initially funded by the address โfreddieng.bnbโ โ which Ng had shared on his X account.
A wallet allegedly linked to a Binance staffer sold holdings of a token just minutes after it debuted on March 23 and hit a peak value of $31.5 million. Source: DEX Screener
Binance did not immediately respond to a request for comment. Ng was contacted for comment.
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Binance Wallet said it appreciated the public efforts, but it would only reward those who submitted reports to a whistleblowing email โto protect whistleblowersโ interests.โ
It said it would hand out $100,000 equally distributed among four anonymous whistleblowers who emailed the exchange.
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