Key takeaways:
- The most prominent cryptocurrency exchange in the world, Binance, is under fire for allegedly firing a worker who exposed possible market manipulation.
- DWF Labs dismisses the charges with no ambiguity in a lengthy response to its esteemed partners.
The most prominent cryptocurrency exchange in the world, Binance, is under fire for allegedly firing a worker who exposed possible market manipulation.
This development has increased the level of scrutiny that the exchange is subject to. It calls into serious doubt its commitment to preserving an equitable trading environment.
According to a report from the Wall Street Journal, Binance dismissed its market monitoring team leader after he exposed DWF Labs’ deceptive practices.
Interestingly, wash trading and pump-and-dump were two of these market techniques. Such activities violate Binance’s terms of service and can result in serious legal repercussions in established financial markets.
Bringing Binance’s operations up to compliance with regulations was the goal of the deposed boss and his group, who were from the traditional finance industry. Certain “VIP” clients were involved in illegal trades that jeopardised the integrity of the platform, according to their investigations.
DWF Labs dismisses the charges with no ambiguity in a lengthy response to its esteemed partners. It condemns them as erroneous interpretations of events that are devoid of supporting evidence.
In response to the claims, a Binance representative said that they would not stand for market manipulation. In addition, Binance states that it has removed around 355,000 users with a total transaction volume of over $2.5 trillion for breaking its terms of service during the previous three years. Binance actively prohibits traders who exhibit indications of manipulating the market:
“Over the last three years, we have offboarded nearly 355,000 users with a transaction volume of more than $2.5 trillion for violating our terms of use.”
Allegations of market manipulation were first made against DWF Labs, a Web3 investment and market-making company, in September 2023. This was after high-volume on-chain activities alarmed cryptocurrency investors.
This particular incident is a part of Binance’s larger regulatory difficulties. US officials censured the company towards the end of 2023 for prioritizing profits over the safety of its users. As a result, Binance consented to pay a hefty $4.3 billion fine for violating anti-money laundering regulations.
Furthermore, Changpeng Zhao, the founder of Binance, recently received a four-months in prison sentence for bringing to light the exchange’s continuous legal problems. The US Securities and Exchange Commission (SEC) has also brought additional civil allegations against Binance.
