The problem of insider trading is a pressing concern in the cryptocurrency ecosystem, especially after the conviction of an ex-Coinbase manager for insider trading.
Although it was believed that the insider trading allegations using cryptocurrencies were first, there has been a recent set of wallet addresses with transaction histories that are related to Binance listings.
Conor Grogan is the director of Coinbase and he took to Twitter to bring attention to the transactions of anonymous wallets during the last 18 months.
The anonymous wallets may have purchased unlisted tokens on Binance during the time leading up to the announcement and then dumped them right after.
This was the first instance of this type of case. It involved Rar tokens. One of these wallets purchased $900,000.00 worth of Rari, just before selling them and then selling them.
Another wallet starting with 0x20 was involved in the purchase and sale of approximately 78,000 ERN between June 17th and June 21. They were then immediately sold after the listing notice.
The transaction that is known as a token dump was made with the TORN token. One of the mentioned wallets purchased hundreds of thousands of these tokens, and then sold them off immediately after their listing announcement.
Similar trends were seen before Binance listed the RAMP token. One of these wallets that began with 0xaf was able to purchase $500,000 worth Ramp over the course of just a few days. Binance received the tokens shortly after the listing announcement.
The owner made a profit of $100,000 from the transaction.
The wallet owner dumped the newly listed token on market in the exact same way as before. This resulted in an additional $100,000 profit from Binance’s GNO listing.
These wallets made hundreds of thousands of dollars profit in the token dump that took place shortly after Binance introduced cryptocurrency.
The correctness of trade may lead to the conclusion that the wallet’s owner has access confidential information about these postings.
Grogan suggested that this might have been the work a “rogue” employee of the listing team who would know about new asset releases or a trader who discovered a API or staging/test trading exchange breach.