Binance has suspended an employee accused of profiting from insider information, prompting an investigation.
Insider Trading Allegations
The allegations surfaced on March 23 when Binance's Internal Audit team issued a statement on social media, revealing that an employee had made trades based on non-public information from their previous role at BNB Chain. The employee used multiple wallet addresses to purchase a large volume of tokens before the public announcement of their launch. This activity is being described as front-running—an illegal practice that involves making trades based on non-public information to profit from subsequent market-moving events.
The Role of Insider Knowledge
The suspended employee had only been part of Binance's Wallet team for a month but previously worked in business development at BNB Chain. The key point of the case is the employee's access to confidential information regarding an upcoming TGE. Binance confirmed that the Wallet team does not typically have access to such sensitive project details, underscoring the severity of the breach.
Alleged Front-Running of UUU Token
The incident involves the UUU token associated with the U DEX Platform. Public reports claim the employee allegedly purchased these tokens through multiple wallet addresses before the official TGE, making substantial profits once the market reacted. Posts on X from users like 'py' showed a wallet address involved in selling over 6 million UUU tokens, leading to a significant price drop. While Binance did not name the employee, the company's Chinese-language account confirmed the use of insider information for market advantage.
The suspension occurs as the crypto industry faces tightening regulations. Binance continues to work with authorities to prevent future incidents.
