The Wall Street Journal recently reported an exclusive story on May 9 about the firing of the head of market surveillance at the world’s largest crypto exchange, following concerns raised about potential market manipulation by a high-profile client.
Former insiders at the exchange revealed that the surveillance team had detected suspicious trading activity by DWF Labs, a firm led by a “Lamborghini-loving crypto trader” that had quickly become one of the top clients of the exchange. The team’s investigation uncovered pump-and-dump schemes and wash trading by DWF on the platform, violating the exchange’s terms of use.
Despite the team’s recommendation to remove DWF from the platform, Binance leadership dismissed the findings and terminated the head of the surveillance team, according to the Journal. Subsequently, several other investigators were either laid off or chose to resign.
In response to the Journal’s report, Binance issued a statement affirming its commitment to a strict market surveillance program and zero tolerance for market abuse. The exchange claimed to have offboarded over 355,000 users in the last three years for violating terms of use, with a cumulative transaction volume exceeding $2.5 trillion.
DWF Labs also responded to the allegations, calling them “unfounded” and asserting its adherence to high standards of integrity, transparency, and ethics while supporting its numerous partners in the crypto ecosystem.
These developments come amidst increased regulatory scrutiny for Binance, including fines for violating anti-money laundering laws and civil charges from the Securities and Exchange Commission. The dismissal of the whistleblower and the surveillance team raises questions about the exchange’s commitment to preventing market abuse and maintaining integrity on its platform. Despite Binance’s claims of impartiality and priority on platform safety, the Journal’s report suggests a pattern of prioritizing profitable clients over market integrity concerns raised by internal investigators.
