Binance has suspended a staff member for allegedly using confidential information from their previous role at BNB Chain to front-run a token launch, according to a statement released Monday.
The employee's "misconduct" involved "front-running trades using insider information" done to "gain improper profits," Binance's Internal Audit team stated on X.
Based on its preliminary investigation, Binance said it found evidence that the employee allegedly purchased tokens through multiple wallet addresses before any public announcement was made for a Token Generation Event.
The complaints were received on March 23. Binance did not name the employee. The exchange business did not immediately respond to Decrypt’s request for comment.
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The employee's behavior "constitutes front-running based on non-public information," Binance wrote in its announcement, adding that it was a "clear breach" of its company policy.
The statement details how the employee allegedly sold part of their holdings shortly after the announcement, realizing "significant profits" while retaining tokens with "considerable unrealized gains."
In the context of Binance’s findings, front-running refers to trading based on non-public information about upcoming market events that will likely affect asset prices.
Binance further revealed that the employee reportedly joined the Wallet team just one month ago after previously taking a role in business development at BNB Chain, the company's blockchain ecosystem, formerly known as Binance Smart Chain.
Binance stated its investigation found no evidence of insider trading within the team itself, emphasizing it has "no business relationship or collaboration" with the project supposedly involved. Binance did not name the project in question.
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The company said it is committed to "proactively” cooperating with relevant authorities and pursuing "appropriate legal action."
The exchange distributed a $100,000 reward equally among four whistleblowers who submitted reports through the company's official channel.
Earlier in February, Binance co-founder Yi He offered up to $10,000 in bounties to employees who report colleagues involved in insider trading or leakage of sensitive business information.
The case bears similarities to Coinbase's 2023 incident involving former manager Ishan Wahi, who admitted to sharing confidential token-listing information.
Edited by Sebastian Sinclair
