Binance, the world’s largest cryptocurrency exchange, has announced that it rewarded four whistleblowers who helped expose insider trading activities.
According to the exchange, the four individuals received a total of $100,000 following an internal investigation triggered by a complaint about an employee engaging in front-running trades to secure improper profits, Binance stated on March 25.
Binance noted that after verifying the claims, it equally distributed the $100,000 reward among the four whistleblowers who reported the issue through its official whistleblowing channel.
While the trading platform acknowledged additional reports shared publicly on X, the company clarified that rewards are strictly reserved for submissions made through its designated reporting platform.
Insider trading investigations
According to Binance’s Internal Audit team, the accused employee previously worked in a business development role at BNB Chain (BNB) before transitioning to the Binance Wallet team a month ago.
Details of the investigation revealed that the employee used information from his former position to anticipate a project’s Token Generation Event (TGE) and acquired a large number of tokens before the official announcement.
After the public disclosure, the employee sold part of the holdings for significant profits, violating Binance’s insider trading policies.
“Prior to the project’s public token launch announcement, the staff member used multiple linked wallet addresses to purchase a large volume of the project’s tokens. Following the announcement, the staff member quickly sold part of his holdings to realize significant profits, while the remaining tokens retained considerable unrealized gains,” the statement read.
Binance has not officially disclosed the tokens in the insider trading scheme, but the employee’s actions involved purchasing the project’s tokens ahead of their public release.
Action against employee
Notably, the exchange stated that it suspended the employee immediately and is cooperating with relevant authorities for potential legal action. Binance also reaffirmed its commitment to transparency and fair trading practices.
“We have zero tolerance for any misconduct. We will continue strengthening internal controls, refining our policies, and ensuring incidents like this do not recur,” the statement added.
It’s worth noting that speculation of insider trading have circulated within the crypto space, especially with the recent meme cryptocurrency frenzy. Given its size, Binance, in particular, contributed to the surge in prices of several meme coins after listing selected tokens, with some traders recording massive profits.
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