Binance: accusations of insider trading

malevolent

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Quote from: rexxarofmoknathal on June 01, 2020, 02:04:40 PM

To be honest, Binance is so large and there are so many employees involved in these things that it's very difficult to stop insider tracking.

But either way, it's not illegal since they're not dealing with securities. Technically they can trade before announcement as much as they want and there will be no repurcussions—other than the knock to their reputation.

I think it'd be better if they just said it upfront that they reserve the right to invest in projects they believe in, and that neither will they prevent employees from investing. The news will spread at a faster rate compared with a scenario when they try to limit the flow of information, and the profits from the price pumping will be divided among a greater number of people (profits per person should also be lower too in such a case).

Quote from: rexxarofmoknathal on June 01, 2020, 02:04:40 PM

It would be extremely difficult to prove it wasn't just some pump/dump group though.

Only if one wants to prove beyond any doubt.

rexxarofmoknathal

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To be honest, Binance is so large and there are so many employees involved in these things that it's very difficult to stop insider tracking.

But either way, it's not illegal since they're not dealing with securities. Technically they can trade before announcement as much as they want and there will be no repurcussions—other than the knock to their reputation.

It would be extremely difficult to prove it wasn't just some pump/dump group though.

malevolent

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Quote from: hugeblack on May 25, 2020, 12:11:59 PM

- Binance implemented tough trade restrictions on its employees to discourage insider trading.

Unless they limit which employees get to learn of interesting things ahead of the rest of the market, these restrictions can be easily bypassed by having friends or family members buy or sell at the right time.

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Binance implemented tough trade restrictions on its employees to discourage insider trading: “Everyone has to get preclearance if they want to trade any kind of cryptocurrency, and they have to wait for at least 30 days to make another trade.”

ScamViruS

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This is an easy way for exchanges to make big profits. Not only the exchange is involved here, the employees of the listing team are also involved here. But no one has the evidence to prove it. They are always fooling the retail traders and thinking of increasing their profits. There is no way to control them, they have the power to do whatever they want.

And now insider trading is mostly in binance. Not just in the case of listing announcements, for any coin of the binance exchange the pump starts 2-3 minutes before the big news is published. Which is very suspicious. CZ now dreams that maybe one day binance will be cryptocurrency bank, and he will be able to rekt his customers as he wishes! Grin

btc_angela

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Recently, ‘Coinbase Listings’ Return: 200% OmiseGo Pump and Dump Raises Eyebrows . So I wouldn't be surprised if Binance is doing this fraudulent practice behind our back and makes a point of total manipulation from inside + pump and dump scheme.

But the problem is that it will be really hard to prove or disapprove this operation from within, unless there are a whistle blower with evidence at hand and present itself to crypto related media. But Binance being a bigger fish to fry? I doubt that we will find the smoking gun here.

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Quote from: gentlemand on May 29, 2020, 04:50:06 AM

The Dex's I've come across are still centralised websites showing you a number that may be totally fictional. They could be selling you their funds and similar for the person at the other end of the trade.

This is certainly true of website based DEXs, such as those which predominantly allow you to swap Ethereum tokens and other pointless tokens. I was thinking more along the lines of something like Bisq - open source software which you can review, download, verify, and run yourself, which connects over Tor to other users in a peer-to-peer manner. The only way a Bisq dev could sell you their own funds would be to open a trade like anybody else, and there is nothing they could do to force you to pick them to trade with.

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Quote from: o_e_l_e_o on May 29, 2020, 03:37:47 AM

If a DEX has access to their customers' wallets, then they aren't a DEX. I know there are plenty of exchanges which call themselves DEXs or peer-to-peer or hybrid exchanges or other attractive sounding words, but if you need to hand over control of your coins to a "trusted" third party then that is a centralized exchange.

Aye. That would not be a Dex but nothing is until there's something either in wallet or on chain. They should bill themselves as non custodial exchanges.

The Dex's I've come across are still centralised websites showing you a number that may be totally fictional. They could be selling you their funds and similar for the person at the other end of the trade.

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Quote from: TheUltraElite on May 28, 2020, 11:58:07 PM

Potentially this is a minus point for the DEXs and their promoters since they have the biggest chance of doing insider trading provided they have access to the customers wallets.

If a DEX has access to their customers' wallets, then they aren't a DEX. I know there are plenty of exchanges which call themselves DEXs or peer-to-peer or hybrid exchanges or other attractive sounding words, but if you need to hand over control of your coins to a "trusted" third party then that is a centralized exchange.

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Quote from: gentlemand on May 26, 2020, 04:38:41 AM

Is it illegal anywhere in the world? As far as I know it isn't and even the reassuring Coinbase has made moves that stink to high heaven.

I expect if it ever was made illegal Binance would move its 'jurisdiction' to somewhere where it was.

Lets compare with the stock market for a moment shall we? The SEC and other regulation organizations have made their moves against insider trading elsewhere and this lead to a decrease in such activities because it is illegal at least from what I know. Now coming to crypto, there is no judiciary to judge them as for now and thus they are free to do what they wish.

Again there comes the debate of of DEX vs CEX. Potentially this is a minus point for the DEXs and their promoters since they have the biggest chance of doing insider trading provided they have access to the customers wallets. Nobody can judge them, lets hope that changes in future of people stop using them, either of which is not a feasible option.

Does not mean CEXs wont do insider trading, but they operate with a physical office and thus have higher chances of being caught.

Darker45

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Quote from: RapTarX on May 27, 2020, 05:51:52 PM

Quote from: gentlemand on May 26, 2020, 05:05:34 AM

Illegal where? It's not as if we know where Binance is based either.

AFAIK, it's not illegal anywhere. I was trying to know its influence on crypto & have seen most exchages or staff do this all the time.
Insider trading is kinda deceptive. I would say the project itself has connection with it. Otherwise, why didn't they disclose the information public earlier? They owe this to share with their investors.

Information and announcement are normally not released until they are official. The thing that parties would release beforehand are teasers or an announcement of a big announcement. However, while the official announcement is withheld, the rumors and probably info leaks are already roaming around and passed on to close contacts. Hence the dump when the official announcement finally arrives. Buy the rumor, sell the news, as they say.

RapTarX

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Quote from: gentlemand on May 26, 2020, 05:05:34 AM

Illegal where? It's not as if we know where Binance is based either.

AFAIK, it's not illegal anywhere. I was trying to know its influence on crypto & have seen most exchages or staff do this all the time.
Insider trading is kinda deceptive. I would say the project itself has connection with it. Otherwise, why didn't they disclose the information public earlier? They owe this to share with their investors.

o_e_l_e_o

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Quote from: carlfebz2 on May 26, 2020, 06:07:36 PM

They can do all they want and wont really be get caught in the end of the day even though its pretty obvious imho but what can we do?

If Binance don't completely ignore the accusations (which they might), then they will almost certainly go down the same route that Coinbase did - conduct an internal investigation in to themselves, conclude they did nothing wrong, and then repeat their behavior again in the future with impunity. What can we do about it? Stop using them. Stop giving our custom and and our coins to these shady centralized exchanges who are only in it to extract as much profit as possible from their user base.

Quote from: carlfebz2 on May 26, 2020, 06:07:36 PM

As said above this had been done also on other known exchange but what happened? This issue would be buried and they would go back to business.

Unfortunately, you are right. Other than the briefly lived "Delete Coinbase" movement when Coinbase paired up with privacy invading human rights abusers, which would have cost them at most a couple of thousand out of their 13 million accounts, exchanges can do pretty much anything they like and still people continue to use them and trust them. It's tragic, really.

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They can do all they want and wont really be get caught in the end of the day even though its pretty obvious imho but what can we do?

As said above this had been done also on other known exchange but what happened? This issue would be buried and they would go back to business.

Insider trading? this isnt new and even go back to traditional markets like forex and stocks this issue is quite common.

gentlemand

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Quote from: Botnake on May 26, 2020, 05:02:51 AM

We know it's illegal but if they are doing it and not getting caught, they are certainly making a lot of money, referring to the company as a whole.

Illegal where? It's not as if we know where Binance is based either.

The biggest risk for an exchange's rapeage of customers is the customers finding out and leaving in disgust. Since Binance seems to have a weird psychological grip over its advocates I doubt they're going to be bothered and will head straight back.

Botnake

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It's always possible, they are in control and they know the information on what's going to happen inside.
However, that accusation needs to have a valid evidence, otherwise that will just result to nothing.
We know it's illegal but if they are doing it and not getting caught, they are certainly making a lot of money, referring to the company as a whole.

Maybe this is what we called the benefit of owning an exchange, doing both legal and illegal will still make them profitable, but illegal is with high risk.

Lastly, we might want to reflect because it's us who are making Binance a hype exchange and any coin that is listed in an exchange, we love to hype it and some just fall for it.

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Quote from: joniboini on May 26, 2020, 01:50:50 AM

So after their IEO pump machines there's a new trick. This is definitely suspicious.

This is not a new trick in my opinion. Many exchange doing this since they are not regulated and they have a lot of profit potential in this scheme. Even in stock market which is regulated has this kind of scenario so what's more to unregulated exchange. Besides that most the exchange are asking for huge some of token as payment besides the fee in BTC/ETH. I believe they do this regularly to a new listed coin for the initial liquidity needed to pump the coin and to show off in crypto community for more listing opportunities in the future.

gentlemand

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Quote from: joniboini on May 26, 2020, 01:50:50 AM

Looks like exchange can dodge this bullet easily.

Is it illegal anywhere in the world? As far as I know it isn't and even the reassuring Coinbase has made moves that stink to high heaven.

I expect if it ever was made illegal Binance would move its 'jurisdiction' to somewhere where it was.

joniboini

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So after their IEO pump machines there's a new trick. This is definitely suspicious. Either one of the employee leak it or it's their whole agenda. It makes me wonder why they don't do this via OTC as buying from the market would definitely cause suspicion.

That being said, this kind of accusation has happened many times and I don't see anything changes. Looks like exchange can dodge this bullet easily.

JeromeTash

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I too, noticed this kind of thing on binance before. One of the terms and conditions they give to project owners is never to disclose when their token/coin is going to be listed in their exchange before it's official but what would surprise me was the price of the token would pump several hours or even days before the official announcement.

I used to follow websites like Coinmarketcal or Coindar that provide coin events such as partnerships or listings since they mostly get updates from official announcements but there was not one single time that i got a token or coin whose price had not spiked yet on the time a major official announcement was made. By the time the major news would be made public, the price was already starting to correct/dump.

Someone is definitely getting the information before they make it official to the public

hugeblack

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In brief:

- The exchange recently listed small-time altcoins that saw a significant price increase days before the official announcement.
- Binance has acquired Travala booking service, Travala has its own tokens which have magically increased 400% in 10 days.
- Binance implemented tough trade restrictions on its employees to discourage insider trading.

Binance accused of facilitating insider trade on Twitter by a researcher from The Block and Canadian exchange chief BullBitcoin @Larry Cermak^[1].
On May 20, Binance announced^[2] a strategic merger between Travala^[3](blockchain-based accommodation booking platform) and TravelbyBit^[4]Travala (cryptocurrency-friendly flight booking portal backed by Binance). Travala Tokens was surging for 10 days in a row prior to the announcement.

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Booking service Travala was essentially acquired by Binance yesterday. Travala has its own tokens (because of course it does) and it magically soared by 400% in 10 days leading to the announcement. Some shady stuff was happening as always

Source

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Quick update - looks like the insider leak theory is confirmed. Tweet (from 5 days ago) from an ex-employee is now deleted. Unsurprisingly, I am blocked by him. Crypto for you

It appears that the platform will control the prices of small altcoins or may affect them.

Source and more ----> https://forklog.media/binance-and-coinbase-accused-of-insider-trade-again/

[1] https://twitter.com/lawmaster
[2] https://www.binance.com/en/blog/421499824684900596/Travalacom-Merges-with-Binancebacked-TravelByBit-
[3] https://www.travala.com/
[4] https://travelbybit.com/

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