Source: Cointelegraph Original: "{title}"
The cryptocurrency exchange Binance has suspended the position of a member of its wallet team and stated that it may take further legal action following the initiation of an internal investigation into insider trading allegations.
The Binance wallet business department announced on the X platform on March 25 that it had launched an investigation after receiving a complaint on March 23 alleging that an employee used insider information for front-running trades to gain improper profits. Preliminary investigations revealed that the wallet team member, who joined last month, is suspected of using information obtained from a previous position in BNB Chain business development to conduct "front-running trades" on a certain project token.
Binance Wallet issued a statement saying, "The employee was aware that the project was about to conduct a Token Generation Event (TGE) and anticipated that it would attract significant community attention." According to the allegations, the employee "used multiple associated wallet addresses to purchase a large amount of tokens" before the public issuance of the project token and "quickly sold part of the holdings to realize substantial profits" after the announcement was made.
Binance Wallet accused the employee of violating company policy by using non-public information obtained during their previous employment to conduct front-running trades. The company stated that it has "immediately suspended the employee's position and is awaiting further disciplinary action" and will cooperate with relevant jurisdictional authorities to take legal action.
Although the employee's name has not been disclosed, the company confirmed that the allegations circulating on the X platform prompted the investigation. Earlier this week, several X users pointed to former BNB Chain operations manager Freddie Ng—whose LinkedIn profile shows he joined the Binance wallet business development team last month.
X user "py" pointed out that a wallet involved in profiting $82,400 from the UUU token, as shown by the decentralized exchange tracker DEX Screener, had its initial funds transferred from the address "freddieng.bnb"—which Ng had publicly shared on his personal X account.
A wallet suspected to be related to a Binance employee sold its holdings just minutes after a certain token went live on March 23, when the token's peak market capitalization reached $31.5 million. Source: DEX Screener
Binance has not yet commented on the matter. This media outlet has contacted Ng for a response.
In its statement, Binance Wallet acknowledged public oversight but emphasized that to protect the privacy and safety of whistleblowers, rewards will only be issued to those who submit valid tips through official reporting channels.
The platform stated that it will distribute a total of $100,000 in rewards among four whistleblowers who reported anonymously via encrypted email.
Related: Five months after issuing a Wells notice, the SEC concludes its investigation into Immutable.
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