Particularly in light of the recent conviction of the brother of a former Coinbase manager for insider trading, the issue of insider trading has become one of the most pressing concerns in the cryptocurrency ecosystem.
The allegations of insider trading using cryptocurrency were thought to be the first of their kind; however, a new set of wallet addresses with transaction history related to Binance listings has now aroused suspicion.
Coinbase director Conor Grogan took to Twitter to call attention to the transactional behavior of some anonymous wallets over the course of the previous 18 months.
Anonymous wallets are believed to have purchased a number of unlisted tokens on Binance in the minutes before their listing was announced and then dumped them immediately after the announcement.
The first such case occurred with Rar tokens, and included one such wallet buying $900,000 worth of Rari just before offering it for sale, then selling it minutes later.
Another wallet starting with 0x20 was involved in buying around 78,000 ERN between June 17-21 and then selling them immediately after the listing notice.
A transaction known as a “token dump” involving the TORN token occurred when one of the aforementioned wallets bought hundreds of thousands of these tokens and then sold them immediately after the listing was announced.
A similar trend was observed before the RAMP token was listed on Binance. Over the course of a few days, one of these wallets starting with 0xaf bought $500,000 worth of RAMP. Minutes after the listing announcement, the wallet sent the tokens to Binance.
The transaction resulted in a gain to the owner of $100,000.
The wallet owner released the newly listed token to the market in the same way as before, resulting in another $100,000 gain from Binance’s GNO listing.
The token dump that occurred shortly after the Binance cryptocurrency debut resulted in these wallets generating hundreds of thousands of dollars in profit.
Due to the correctness of the exchange, it can be deduced that the owner of the wallet has access to sensitive information about these posts.
Grogan hypothesized that this may have been the work of a “rogue employee related to the listings team who would have knowledge about new asset releases or a trader who discovered some sort of API or test/staging trade trading violation.” “.