Binance co-founder Yi He has taken a bold stance against insider trading within the company. In response to recent allegations of potential insider trading issues, Yi He announced on Twitter that Binance will offer $10,000 bounties to employees who report colleagues involved in such activities.
Policy Changes and Firm Consequences
— Yi He (@heyibinance) February 5, 2024
Yi He emphasized a zero-tolerance policy towards leaks, stating, “If there is any information leaked about a project for any reason, you will be warned once and then fired.” Furthermore, she outlined consequences for leaked information, including the cancellation of listings and extensions of pending listings based on subsequent adjustments.
Triggered by Ronin Listing Irregularities
The decision to implement these changes follows reported “irregularities” surrounding the listing of Ronin on Binance’s exchange. The token’s price surged before the official announcement but plummeted by 20% immediately after trading commenced. Speculation arose that individuals with prior knowledge of the listing were accumulating the token before selling it at a higher price.
ronin instantly nukes 20% on binance listing announcement after pumping for weeks straight
this is criminal pic.twitter.com/l4GGM0OtBg
— tuba 🦈 (@0xtuba) February 5, 2024
This situation bears resemblance to Coinbase‘s past challenges when Crypto Twitter identified a wallet of seemingly front-running tokens that Coinbase was considering listing. In that instance, former Coinbase product manager Ishan Wahi and his brother Nikhil Wahi engaged in insider trading, trading on confidential information about upcoming crypto asset listings on Coinbase.
Coinbase Insider Trading Case
Between June 2021 and April 2022, Ishan Wahi provided advance information about upcoming listings to his brother and a friend, Sameer Ramani. This allowed them to profitably trade at least 25 crypto assets, with nine of them classified as securities, resulting in a profit of approximately $1.1 million. The Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) charged the trio with insider trading.
The SEC settlement required the Wahi brothers to disgorge their ill-gotten gains and pay interest. In the DOJ case, Ishan Wahi pleaded guilty to two counts of conspiracy to commit wire fraud, leading to a two-year prison sentence.
Yi He’s Vigilant Approach
Yi He’s decision to offer bounties reflects a commitment to maintaining the integrity of Binance’s operations. By proactively addressing concerns and implementing strict consequences, she aims to foster a culture of transparency and accountability within the organization.
As the cryptocurrency industry continues to evolve, such measures become increasingly crucial to build trust among users and investors, ensuring a fair and equitable trading environment. Yi He’s actions underscore the ongoing efforts within the industry to uphold ethical standards and combat illicit activities.