Close
Binance has been accused of market manipulation after allegedly firing its head of market oversight. Despite the exchange’s claims of strict monitoring and zero tolerance for abuse, the exchange is facing charges after a major customer reported possible manipulation.
The Wall Street Journal published an exclusive report on May 9 that claimed Binance, the largest cryptocurrency exchange, had fired the head of its market monitoring team after raising concerns about possible market manipulation by a client with High profile, fired.
According to former Binance insiders interviewed by the Journal, the monitoring team identified suspicious trading activities by DWF Labs, a company run by a “Lamborghini-loving crypto trader” that quickly became one of Binance’s top clients. The team’s investigation concluded that DWF was involved in pump and dump schemes and wash trades on Binance. in such a way that it has violated the terms of use of the exchange.
However, when the monitoring team submitted a report recommending DWF be removed from the platform, the Binance team denied the findings and fired the team leader, according to the journal. Several other researchers were subsequently fired or voluntarily resigned.
In response to the Journal’s report, Binance released a statement on X confirming its “rigorous market monitoring program” and stating that it does not tolerate market abuse. The exchange announced that over the past three years, it has kicked out nearly 355,000 users with a transaction volume of more than $2.5 trillion for violating its terms of use.
Binance added that “market maker competition is intense,” and that its research team’s job is “to be unbiased and to look at the evidence without any bias, including bias that may arise from claims made by market makers against their competitors.” The purpose of this exchange is to ensure healthy competition and protect users from manipulation.
DWF also responded to the “baseless” claims that “distort the facts.” The company said it “operates with the highest standards of integrity, transparency and ethics” and is committed to supporting its more than 700 partners across the crypto ecosystem.
The allegations come as Binance faces a lot of regulatory scrutiny. In 2023, the exchange admitted to violating US anti-money laundering requirements and agreed to pay $4.3 billion in fines. Founder Chang Peng Zhao also stepped down as CEO and was sentenced to four months in prison.
The SEC also filed civil charges against Binance accusing it of misleading US investors about its risk controls and trading practices. An earlier report by the Journal linked Zhao to two trading companies operating in Binance’s US arm. After this incident, concerns were raised about the independence of the activity and the monitoring of their compliance.
The firing of the whistleblower and his team raises further questions about Binance’s commitment to preventing abuse and market manipulation on its platform. While the exchange maintains that it does not favor any user and prioritizes the safety of the platform, the Journal’s report shows that at times it puts the interests of profitable customers ahead of market integrity concerns raised by its own researchers.
