When will the crypto rat-catching operation officially launch?
Written by: ChandlerZ, Foresight News
On March 24, according to an official announcement from Binance, its internal audit team received a report on March 23, 2025, accusing an employee of using insider information for front-running trades to gain improper profits. Binance has launched a comprehensive internal investigation.
At the time of the alleged incident, the individual was working within the Binance wallet team, which had no business relationship or cooperation with the involved project. However, they are suspected of abusing information from a previous position for personal gain. The employee had joined the wallet team a month ago after working in business development at BNB Chain. They utilized information obtained from their former position and familiarity with on-chain projects to know that the project was undergoing a TGE, and purchased a large amount of project tokens using multiple linked wallet addresses before the project publicly announced the token.
After the announcement, the employee quickly sold part of their held tokens, making substantial profits, while the remaining tokens retained significant unrealized gains. This behavior constitutes front-running based on non-public information obtained from their previous position, clearly violating company policy.
The preliminary investigation has concluded, the involved party has been suspended, and they will face legal accountability. Additionally, Binance has completed the verification and deduplication of the report and will distribute a $100,000 reward evenly among the whistleblowers.
On-chain evidence catches the "mouse tail"
According to X user @土澳大狮兄 BroLeon, Binance employee Freddie Ng is accused of illegal insider trading, participating in the manipulation and arbitrage of UUU tokens amounting to $110,000. After publicly disclosing on-chain information, he requested Binance to provide a reasonable explanation regarding the matter.
BroLeon stated, "The UUU token rat trading has been confirmed! I just verified this report, and the entire process of stealing has been exposed on-chain. I wonder how Binance wallet BD and growth employee Freddie Ng, who got caught this time, will be dealt with."
Based on the entire criminal process outlined, the Binance employee named Freddie Ng certainly knew in advance that the UUU token was about to be pumped. Using his secondary account with an address starting with 0xEDb0, he spent 10 BNB to buy 24.1 million tokens at an average price of $0.00026, worth $312,000, and transferred all to a wallet starting with 0x44a.
Subsequently, Freddie sold 6.02 million UUU tokens through the Bitget wallet at an average price of $0.0188, earning $113,600, and distributed the remaining UUU tokens to 8 different addresses, each worth several tens of thousands of dollars.
BroLeon remarked, "The flaw in this guy's plan is that the wallet he used for the rat trading received funds 121 days ago from his real-name wallet freddieng.bnb (starting with 0x77C)."
On March 23, the BNB Chain trading platform uDex officially launched the UUU token on four.meme. uDEX is one of the members of BNBChain MVB Season 8, providing users with on-chain information and allowing them to trade directly from social networks. Currently, the market capitalization of the token is $8.22 million.
Industry ailments are hard to cure
Insider trading is not a problem unique to the cryptocurrency market. For example, historical data from the U.S. Securities and Exchange Commission (SEC) shows that insider trading-related enforcement cases account for an average of 8-9% of total annual enforcement actions, a proportion that already exists in traditional financial markets.
This is not the first time Binance has faced accusations of insider trading, but there have been few cases of employees being investigated. Since 2018, the cryptocurrency industry has continuously faced systemic doubts regarding internal trading on trading platforms. Several exchanges have been accused of similar rat trading issues at different times, which has become a persistent problem in the industry.
The transparency and decentralization of the cryptocurrency market have not completely eliminated the risks of insider trading. On the contrary, due to the lack of unified regulation and inadequate internal controls, trading platforms are prone to becoming breeding grounds for such behavior. Although major exchanges have strengthened compliance and risk control systems, the anonymity of cryptocurrencies, technical complexity, and global operational models still pose significant challenges for traditional regulatory measures.
Industry giants like Binance often exhibit a strong deterrent effect when facing issues of internal trading abuse, but similar incidents frequently occur due to a lack of effective prevention and monitoring measures. Externally, Binance's swift investigation results and actions demonstrate its determination to rectify the situation, but whether it can completely eliminate the rat trading problem still requires the industry to strengthen compliance management and transparency from the source.
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