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Binance at the center of latest insider trading - ripping millions of dollars from the ecosystem

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Could just be some random lucky dudes as some industry comments say, or simply insider trading as the data presented exposes.

In what seems to be crypto's ecosystem third openly addressed case of insider trading if eventually pushed through, Binance is at the center of having leaks or potentially partaking in trading crypto assets before announcing its listing for a profit.

The head of product and business operations at Coinbase, Conor Grogan, took claims of insider trading on Binance listings spanning through 18 months to twitter. The claims by Grogan showcase traces of timely purchases of select tokens only to be sold off upon Binance listing. Reports say that these front runners have made millions of dollars from this practice.

Grogan's investigation shows several wallets connected to several token trades that were initiated upon Binance listing.

According to Grogan, a wallet bought $900,000 worth of RARI governance tokens only to dump it minutes after Binance listing, similarly, another wallet bought $78,000 Ethernity’s ERN crypto token at a more distant time between trades of June 17, 2022, and June 21, 2022, also dumping it immediately after listing. Other notable wallets bought hundreds of thousands of TORN tokens and Ramp tokens worth over $500,000 with more old dated links of GNO token listing also being reaped of $100,000.

These practices, according to Grogan may signify insider MNPI, most likely from a rogue employee connected to the listings team who would have details on new asset announcements or a trader who found some sort of API or staging /test trade exchange leak.

Most of crypto twitter has taken the latter suspicion and labelled the event a norm in the space, while also citing that Binance and other exchanges including listing teams and token teams have always reaped the markets in such scenarios. However, considering the regulators interest in the crypto space as with its widely noted charges against the former product manager at Opensea over NFT insider trading and Ex-Coinbase manager's brother sentenced to 10 months in insider trading case, this may just be a call for more regulatory oversights on the practices of these centralized exchanges.

Binance trying to cover up their tracks

The above tweet started the investigation of Conor Grogan leading to the reveal of over 18 months of linking practices. The rocket pool token (RPL) was potentially front-run upon it's listing on binance which my investigation reveals that binance may have attempted covering up the event, which would also mean that they likely have a part to play in what is happening in the listing markets.

Don't Trust, Verify!

If you look at the above tweet, the screenshot says the announcement was made at 12:00 which is weird considering that in my end it shows the announcement was made by 5:00AM, the story here didn't quite check out given that the trades were first initiated within 3AM and sold off at about 4:14AM +UTC so that would mean it was sold off before Binance announcement totally eliminating the idea of it being an insider trade as the profit would not have been made over Binance's listing, but is that true?

Token trade history as shown on etherscan

Final trade as shown on etherscan

I quickly recalled a conversation I had with a friend where he explained how numbers are easily manipulated when it comes to information stored on centralized servers, where he cited that he could easily change dates and times of publications and no one would know, that in fact, the system would automatically reorganize and place the publication right where the date and time specifies.

Looking at this announcement on binance, I wondered if it was due to my geolocation that the time differs or what. I realized the blog announcement was actually edited to seem like it was published after the trade had already happened and to correlate with the time a tweet announcement by binance was published as well, clever? not quite.

Looking through the waybackmachine it happens that a snapshot by internet archive was taken just around 4:03AM, 3 minutes after the original time of publication, showing the actual time of publication being 4:00AM of which the tokens were sold 10 - 14 minutes after and also proving that the link actually did exist before 5:00AM as the publication time now displays.

Screenshot of the archived page of Rocket Pool(RPL) listing announce on binance.

The next snapshot by Internet archive happened around 9:01AM, which is about 40 minutes after the Tweet from @Scopeprotocol signaling the potential insider trade got some tractions and guess what? At this time, binance had edited the publication time to 5:00AM.

Screenshot of the edited archived page of Rocket Pool(RPL) listing announcement on binance.

From the presented data of all activities surrounding recent binance listing and trades, it does appear that binance may have been involved in the practices.

Thank you and please leave a comment, your thoughts matter to me

Do not hesitate to point out any mistakes I may have made in the investigation