Key Takeaways
- A Binance employee who used non-public data to engage in front-running trades was suspended immediately.
- The action was taken after an investigation that stemmed from complaints by some of the platform users.
- The users who found the misconduct and raised the complaint will be rewarded with 100,000 USD.
- Binance urges its users to report any malpractice, ensuring a safe and secure trading experience.
Binance, the leading blockchain ecosystem, has suspended an employee for using confidential information obtained from a previous role at the platform to engage in insider trading. The news was revealed through Binance Wallet’s official X handle, which acted upon a complaint about suspicious trading activity tied to a recent token launch. The platform announced a $100,000 reward for those who complained about the activity, and further legal charges will be brought against the employee beyond the suspension.
Binance Employee Used Confidential Token Generation Event (TGE) Data to Make a Profit
The complaint about a staff member engaged in front-running trades using insider information was received by Binance’s Internal Audit team on March 23rd, 2025. The team took the complaint seriously, and the subsequent investigations revealed that an employee who previously worked at BNB Chain had access to privileged data regarding an upcoming Token Generation Event (TGE).
The employee used multiple wallets to buy a significant portion of the tokens before the public announcement of TGE and sold the profits after the announcement. As a result of this behaviour, the staff member was immediately suspended, and further disciplinary actions are pending. Binance kept the identity of the staff and the token a secret; however, a number of online web3 analysts speculated on various names.
Binance Announces 100,000 USD Whistleblower Reward
To ensure transparency and to encourage more users to report misconduct, Binance has announced a 100,000 USD reward, which will be distributed equally to four whistleblowers who raised the complaint. While acknowledging the reports shared via social media, the platform emphasized that whistleblower rewards would only be applicable to users who raise complaints through the official channel ([email protected]). Binance encourages anyone with valid details about any misconduct to report it as soon as possible, ensuring a safe and transparent trading environment for the participants.
Insider Trading Allegations Remain a Serious Issue in the Blockchain Industry
Insider trading is not a new phenomenon in the crypto world, and it remains a serious issue that can only be eradicated by employing trusted builders. A major insider leak issue occurred in 2022 when a Coinbase product manager leaked the time of a token listing’s public announcement. The U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) took action against the insider trading scheme and observed that it violated Section 10(b) of the Securities Exchange Act and Rule 10b-5 of the SEC regulation.
Section 10(b) of the Securities Exchange Act prohibits manipulative or deceptive trading practices within the purchase or sale of any security. With SEC’s Rule 10b5-1, major holders can sell a predetermined number of shares of the asset at a predetermined time. The rules are used by corporate executives to counteract insider trading and to create a genuine trading experience for the users.
About Binance
Founded in 2017 by Chinese-born Changpeng Zhao (CZ), Binance is a leading hybrid exchange for cryptocurrencies and other digital assets. It is the largest exchange by holders’ assets and daily trading volume. The network launched Binance Smart Chain, a low-cost blockchain ecosystem, in 2020, later renamed to BNB Chain. The native token of the blockchain is $BNB, with a market capitalization of $ 90 billion.