Binance blocked more than BRL 10 million from a user who allegedly traded insider on the exchange. That is, the trader would benefit from privileged information from cryptocurrency listings.
The information was presented this Wednesday (29) by Changpeng Zhao, founder and CEO of Binance, after FatMan presented details of the case.
CZ gives more details and also claims that such user has not even tried to release his funds. After all, he would have to prove his identity and could even be arrested, as happened to three people in a similar case at Coinbase.
FatMan’s Insider Trading Allegations on Binance
FatMan rose to fame after exposing the suspicious practices of the Terra cryptocurrency (LUNA) and the TerraUSD stablecoin (UST). However, he loved the new profession of detective so much that he continued to investigate more crimes in the industry.
In its latest analysis, FatMan highlights a case of insider trading in cryptocurrency listings on Binance. According to him, one user benefited more than $1 million from the scheme.
“On-chain data reveals the covert operations of a person who accessed Binance listings”denounced FatMan this Tuesday (28). “For several months, this anonymous individual anticipated the rallies of multiple altcoins following their listings on Binance, with a 7-figure gain.”
Citing evidence, FatMan points out that the trader bought $53,000 worth of Frax Share (FXS) just three days before Binance put it on its platform and the cryptocurrency’s price skyrocketed.
Later, the same trader allegedly bought 131 ETH (R$1.2 million at the current exchange rate) of the Virtua cryptocurrency (TVK). Two days later, TVK was listed on Binance, doubling the trader’s investment.
“He sold at the next high and withdrew 277 ETH without having to use it on a centralized exchange.”
The examples follow in a more detailed article, noting that the trader enjoyed several highs thanks to insider trading, all coming from Binance.
Binance’s CEO made it a point to respond to FatMan
Although Changpeng Zhao should have focused on the CFTC lawsuit, the billionaire took his time to respond to the allegations. After all, insider trading is a criminal practice and must be combated.
According to CZ, such a trader had already blocked US$2 million (R$10.2 million) on Binance, but never tried to recover the amount.
“Thanks for reporting this. We froze $2 million related to the address in question prior to their posting (and they never asked for a refund). We also always fight against possible leaks [de informações]etc. We ask that you continue to let us know. [sobre casos assim] in the future. It helps us all.”
Thank you for pointing this out. We had $2 million blocked for the address in question before your thread (and they never asked to reclaim). We also always fight against possible leaks, etc. We welcome you to mention them in the future as well. Helps us all.
— CZ 🔶 Binance (@cz_binance) March 29, 2023
Finally, FatMan called the trader “one of the dumbest criminals” because he didn’t cover his tracks.
The criminal acts took place between 2020 and 2021. However, Onchain data is eternal and can be used as evidence against the suspect at any time. For example, the US recently resolved a 2012 case involving BRL 5.3 billion worth of Bitcoin, which resulted in one person being arrested.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
