- Binance is taking steps to combat insider trading
- Will pay between 10,000 and 5 million dollars for verified tips of corrupt employees
- The measure comes after RON plummeted almost 30% after its listing on Binance
- The director of Coinbase had already suggested internal work on the platform
The world’s largest cryptocurrency exchange is willing to pay up to $5 million to whistleblowers who identify corrupt employees within the company.
In a new effort to combat potential insider trading, Binance has announced a new bounty program that will pay a significant amount of money to those who provide information on potentially corrupt staff members related to the token listing process or other areas.
“If you verify that Binance team members are corrupt, we will keep your identity confidential and provide you with a security vulnerability bonus of between $10,000 and $5 million,” Binance co-founder Yi He announced in a series of posts. recent in X.
Controversy surrounding the RON list
The move comes in response to the recent controversy that arose from the listing of Ronin (RON) on the platform. Earlier this week, Binance added RON, the native token of gaming-focused blockchain Ronin, to its trading offering. However, RON quickly plummeted after its incorporation.
Before its listing on Binance, RON had experienced an increase of more than 30%, trading above $3.5 on launch day, according to data from CoinGecko. However, after its inclusion on the platform, it fell sharply, losing the profits accumulated until then. RON is trading at USD $2.6 at the time of publication.
The price performance caused some members of the community to raise eyebrows and cast suspicion on the possibility that this was a case of insider trading.
#Binance will list @Ronin_Network $RONIN with Seed Tag Applied.
— Binance (@binance) February 5, 2024
➡️ https://t.co/oLDBZsCVzq pic.twitter.com/Ok0y8FLkbe
The Binance co-founder was quick to address these theories, claiming that, instead, users had managed to discover on their own through Blockchain data that the platform was preparing to list the token. He hinted that, so far, there has been no indication of an inside job, but that the company is preparing to take steps to avoid these potential cases of corruption.
Binance Takes Additional Measures
In addition to the reward program, Ye said that Binance would strengthen the management of new token listings and ensure that only necessary employees know the details of the listings. Anyone responsible for a leak would be warned and fired in the future.
Additionally, the exchange will delist tokens that it suspects have been leaked through external trading communications, and has committed to strengthening script monitoring and beefing up its external communications.
Binance will also permanently blacklist projects that hire staff fired from the crypto exchange for corruption. Yi He said projects should contact Binance to conduct background checks and thanked those who share information about security vulnerabilities and personnel leaks.
Coinbase director Conor Grogan had already speculated last month about the possibility that a “rogue employee” connected to the token listing team at Binance had used inside information to generate potential profits in his pocket, following a curious trading pattern in certain wallets.
In particular, Grogan said he had identified a handful of wallets that show, for more than 18 months, a pattern of purchasing tokens just before listing announcements and selling them once the tokens are listed on the platform.
