Binance Fires Employee Who Discovered Evidence of DWF Labs Market Manipulation
The Wall Street Journal has reported that cryptocurrency exchange Binance fired a member of its market surveillance team who had uncovered evidence of market manipulation by DWF Labs, a high-profile client.
Key points:
- Binance’s market surveillance team found evidence of pump-and-dump schemes and wash trading by VIP clients, including DWF Labs.
- DWF Labs, a crypto investment firm, was making more than $4 billion in monthly trades on Binance.
- The fired employee and his colleagues submitted a report alleging DWF had manipulated token prices through $300 million of wash trades in 2023.
- Binance deemed the evidence insufficient and fired the head of the team a week after the report’s submission.
According to interviews with current and former Binance employees, documents, emails, and other industry participants, the market surveillance team had been tasked with finding signs of market manipulation and other prohibited activities.
This was part of Binance’s efforts to address scrutiny from financial regulators. The team found that “VIP” clients, who trade more than $100 million per month, were participating in pump-and-dump schemes and wash trading.
Also read: Donald Trump Pledges To Accept Crypto Donations For Presidential Campaign
DWF Labs, a prominent crypto investment firm that emerged as a prolific investor in early 2023, was found to be at the center of the alleged market manipulation.
Binance investigators compiled a report on DWF Labs in 2023
The Binance investigators compiled a report detailing DWF’s alleged manipulation of several token prices through $300 million of wash trades in 2023. However, Binance determined that the evidence was insufficient to prove market abuse. Surprisingly, Binance fired the head of the market surveillance team just a week after submitting the report.
Binance stated that it does not tolerate market abuse and has offboarded nearly 355,000 users, with a transaction volume of more than $2.5 trillion, for violating its terms of use. DWF Labs, in a post on social media platform X, called the allegations “unfounded” and claimed they distorted the facts.
Read more: FTX Reveals Plan To Reimburse Creditors, Most Will Receive 118% Of Claims
The revelation of the employee’s dismissal has cast a shadow over Binance’s commitment to combating market manipulation and ensuring a level playing field for all traders.
