Key takeaways:
- Because of the recent conviction of the brother of a former Coinbase manager, insider trading has gained much attention in the crypto world.
- One of the wallets bought $500,000 of RAMP in RAMP tokens before sending them to Binance minutes after the token was listed on the Binance platform.
Insider trading has emerged as a prevalent issue in the cryptocurrency community, particularly in light of the recent conviction of the brother of an ex-Coinbase manager. An additional set of wallet addresses with transaction records connected to Binance listings have sparked suspicions. The insider trading accusations were previously thought to be the first to utilize cryptocurrencies.
The recent transaction actions of a few anonymous wallets were brought to the public’s attention by Conor Grogan, director of Coinbase, through Twitter. Minutes before Binance announced their listing, the unnamed wallets allegedly bought several unlisted tokens and sold them as soon as the announcement was made.
The initial instance of this included Rar coins, one of these wallets bought for $900,000 seconds before selling them minutes after they were listed. Between June 17 and 21, another wallet with the prefix 0x20 purchased around 78,000 ERN, which sold immediately after the listing was announced. When the listing announcement for the TORN coin was made, one of the wallets indicated above purchased hundreds of thousands of these tokens and immediately sold them.
Before the RAMP token was listed on Binance, a similar trend was seen. One of these wallets with the 0xaf prefix purchased $500,000 of RAMP over a few days before submitting the tokens to Binance minutes after the listing announcement. The trade resulted in a $100,000 profit for the owner.
Another $100,000 payday came from Binance’s GNO listing. The wallet owner sold their newly listed token on the market in the same fashion as before, likely trying to make a quick profit.
The token dump right after its listing on Binance was profited by these wallets hundreds of thousands of dollars. This accuracy suggests that the wallet owner has insider information about listings on the exchange, indicating possible market manipulation by an employee or contractor at Binance. Grogan stated:
“most likely from a rogue employee connected to the listings team who would have details on new asset announcements or a trader who found some sort of API or staging /test trade exchange leak.”
Binance has recently announced that it will impose a 90-day lockup period for its employees, prohibiting them and their families from selling any newly listed token within the next three months.
