WSJ Claims Crypto Has An Insider Trading Problem

Insider Trading Rampant in Crypto, According to WSJ

The report highlighted that one unknown crypto wallet had acquired a stake worth $360,000 of Gnosis coins, days before Binance revealed that it would list Gnosis on its platform.

Shortly after the announcement, the wallet took advantage of the token’s rising price and liquidated everything in 24 hours. Per the report, the anon wallet netted a profit of about $140,000 and a return of roughly 40%. The same wallet also exhibited similar patterns with at least three other tokens.

The report further said that 46 wallets had purchased a combined $17.3 million worth of cryptocurrencies just before they were listed on Coinbase, Binance, and FTX.

Although visible profits from the sale of the tokens were more than the claims, the actual profits are likely higher. For instance, many wallets moved a part of their stakes to exchanges instead of selling directly.

Coinbase, Binance, FTX Denies Claim

In response to the report, Coinbase, Binance, and FTX each said they had compliance policies prohibiting employees from trading on insider information.

Coinbase and FTX said they reviewed the analysis and determined that the trading activity mentioned in the report didn’t violate their policies. While Binance's spokesperson said none of the wallet addresses were linked to its employees.