Coinbase CEO suspected Binance managers of leaking insider information

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Management of the largest AmericanThe crypto exchange believes that a Binance employee or trusted trader is using confidential information about an upcoming crypto asset listing for insider trading.

Coinbase CEO Conor Grogan(Conor Grogan) addressed the crypto community on Twitter, drawing attention to the suspicious transactional activity of several anonymous wallets. The owners of these wallets regularly bought unlisted tokens minutes before the Binance listing announcement, and then sold off the purchases immediately after the announcement.

Conor Grogan suggested there was fraudit could have been a Binance employee or trader who had illegal access to information about new listings through the listing team, or data from the exchange's test site.

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If this is frontrunning, there could be a few reasons for it:

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

— Conor (@jconorgrogan) January 23, 2023

The head of Coinbase gave examplesseveral cases he identified. First, one wallet bought $900,000 worth of Rari tokens seconds before the listing announcement went out, then dumped them minutes after the sale went live. The second wallet, starting with 0x20, accumulated approximately 78,000 ERN from June 17 to June 21, 2022 and sold it immediately after the listing announcement. A similar dump was observed with the TORN token, where one of the mentioned wallets bought hundreds of thousands of tokens and sold immediately after the listing announcement.

“Dump of tokens immediately after their listing onBinance brought hundreds of thousands of dollars in profit to wallet owners. The accuracy of the transaction indicates that the owner of the wallet has access to inside information about the listing,” says Conor Grogan.

It appears that there is a pattern of Binance front-running over 18+ months

I found connected wallets that:
-Bought $900k Rari seconds before and dumped minutes after listing
-Bought ~78K ERN between June 17 and June 21 and sold right after listing announcement
-Did same w/ TORN https://t.co/yAolrfeHkO pic.twitter.com/VRq3vzfcgd

— Conor (@jconorgrogan) January 23, 2023

In his observations, the head of a competing exchangerelies on reports from Chinese cryptojournalist Colin Wu, who is on Twitter under the pseudonym @Wu Blockchain and was the first to express
concerns about suspicious transactions by owners of anonymous wallets.

Colin Wu gave an example where an anonymous addresswallet (0x5f&#8230;47db) bought about 6,200 RPL ten minutes before Binance published the RPL listing announcement, and then sold everything ten minutes after the announcement, making a profit of over $55,400.

Last July, the U.S. Attorney for the Southern District of New York filed charges
in insider trading to three managersCoinbase Global. In January, a Manhattan federal court handed down a guilty verdict, sentencing one of the defendants to a ten-month prison sentence, as well as deportation from the United States upon its expiration.