Binance has suspended a staff member after its investigation into insider trading claims found the employee used information from a previous role to front-run trades.
According to a March 25 X post, Binance began looking into the matter on March 23 after receiving a complaint about suspicious trading activity tied to a recent token launch.
The initial allegations suggested that the employee, who recently joined the Binance Wallet team, may have used insider knowledge from a previous position at BNB Chain. Binance said the staffer was aware that a project was preparing for a Token Generation Event and expected strong community interest.
Using multiple connected wallets, the employee reportedly bought up a large number of the project’s tokens before the public launch. After the announcement, they sold part of the holdings for a significant profit.
Binance said the staff member was suspended immediately following the findings and now faces further disciplinary action.
The exchange added it will cooperate with authorities in the relevant jurisdiction and pursue legal steps in line with applicable laws. Any assets linked to the incident will be handled according to regulatory requirements.
Binance didn’t name the staff member involved but said the investigation was triggered by allegations that surfaced on X earlier this week.
Users on X began flagging suspicious wallet activity linked to a former BNB Chain operations manager, Freddie Ng, who had recently joined the Binance Wallet business development team. (See below.)
According to a March 23 post by journalist Colin Wu, a wallet allegedly linked to Freddie Ng spent around $6,200 to acquire 24.1 million UUU tokens, or roughly 2.4% of the total supply, ahead of the token’s public launch.
About 6 million tokens were later sold through related wallets, generating over $113,000 in realized profits.
crypto.news reached out to Ng for comment but did not hear back at publication time.
A persistent problem in the industry
Insider trading allegations aren’t new to crypto and remain a serious challenge for an industry built on transparency and decentralization.
Insider trading can severely disadvantage retail investors, often stripping them of potential gains. Beyond individual losses, such practices can distort market dynamics and undermine confidence in otherwise promising projects.
Similar cases, like the 2022 Coinbase incident where former product manager Ishan Wahi leaked upcoming token listings to his brother Nikhil Wahi and friend Sameer Ramani, show that even major players aren’t immune to such misconduct.
Although such actions carry serious legal consequences, they continue to surface.
Binance itself has been accused of insider trading multiple times in the past. Last year, the exchange launched an internal investigation into suspected insider trading involving the Solana-based meme coin Book of Meme (BOME).
Earlier this year, automated market maker Aerodrome Finance suspended two of its contributors just hours after suspicious trading activity was detected during the launch of Venice’s VVV token.
These malpractices are not limited to just trading platforms. Last year, Mystiko Network faced insider trading allegations during its second airdrop after on-chain data showed millions of tokens were funnelled to newly created wallets.
More recently, LIBRA, a meme coin promoted by Argentine President Javier Milei, was marred in controversy after reports alleged that insiders had prior access to the token, which allowed them to profit over $110 million right after its launch.
