Crypto Exchange Binance added that it could take further legal action after halting members of the Binance Wallet team and launching an internal investigation into insider trading claims.
Binance Wallet, Exchange's Crypto Wallet Business, said on March 23, “we began our investigation after receiving a complaint claiming we were engaged in a front-running transaction to make inappropriate profits using insider information,” he said in the X-Post on March 25.
A preliminary investigation claimed that the Binance Wallet staff, who joined the team last month, are suspected of using information from previous positions in the BNB chain's business development role in the “front run” transaction of project tokens.
“Employees were aware that the project was planning a Token Generation Event (TGE) and expected it to generate great community interest,” writes Binance Wallet.
The staff claimed that they “purchased a large number of tokens for the project using multiple linked wallet addresses” before revealing the token launch, and then, after the announcement, “speeched a portion of his holdings to realize significant profits.”
Binance Wallet denounced staff members in front-running trades based on private information obtained from their previous role in violation of the company's policy.
The staff added “it will be suspended soon and further disciplinary action is pending,” adding that the company will work with authorities in the relevant jurisdiction to take legal action.
The company did not name the staff, but noted that allegations circulating on X prompted an investigation.
Earlier this week, multiple X users pointed to Freddie NG, the former operation manager of the BNB chain. That LinkedIn shows that he joined the Binance Wallet business development team last month.
As X user “Py” pointed out, one of the wallets in the Dex Screener show is paying $82,400 from the token in question. The UDex Platform (UUU) is the wallet that originally received a UUU token from another wallet funded by an address called “Freddieng.bnb.”
The wallet, linked to Binance Staff, sold token Holdings just minutes after its debut on March 23rd, reaching its peak of $31.5 million. Source: Dex Screener
Binance did not immediately respond to requests for comment. Ng was asked to comment.
Related: BNB Chain launches $100 million liquidity program
Binance Wallet said it appreciates public efforts, but those who submit the report will only reward whistleblower emails “to protect the interests of whistleblowers.”
It said it would distribute $100,000 evenly distributed among the four anonymous whistleblowers who emailed the exchange.
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