Binance: the dismissal of the investigator who uncovered the manipulation of DWF Labs

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Binance has proceeded to fire the investigator who had discovered market manipulation by the client DWF Labs. 

The former employee and his colleagues in Binance’s market surveillance team had been tasked with identifying signs of illicit activity. The team had prepared a report highlighting the manipulation of various tokens by DWF Labs, a client of Binance.

Let’s see below all the details. 

The dismissal by Binance of the investigator who had discovered irregularities at the client DWF Labs

As anticipated, according to what was reported by the Wall Street Journal, Binance fired an employee who had discovered evidence of market manipulation by DWF Labs.

This is an investment company in cryptocurrencies and one of the exchange’s clients. The news is based on interviews with former and current Binance employees, documents, emails, and other industry participants.

The former employee and his Binance market surveillance team were hired to identify signs of market manipulation and other illicit activities, as part of the exchange’s efforts to ensure compliance with regulations. 

The team discovered that some “VIP” customers, those who trade more than 100 million dollars per month, were involved in pump-and-dump and wash trading schemes, violating Binance’s terms of use.

DWF Labs, which was processing over 4 billion dollars in monthly transactions, became a significant investor in cryptocurrency projects in early 2023, when it participated in several funding rounds in a generally stable market. 

Unlike the traditional venture capital model, DWF Labs, founded by high-frequency cryptocurrency traders, would purchase millions of dollars worth of tokens at a discount, earning profits when their price increased.

Accusations of wash trading: Binance and DWF Labs respond to investigations

Binance investigators have presented a report claiming that DWF Labs had manipulated the price of several tokens with $300 million in wash trading in 2023. 

However, Binance stated that there was not enough evidence of market abuse, according to the WSJ. One week after the report was filed, the head of the team was fired.

Binance told the WSJ that the accusations against DWF Labs were not “fully proven” and rejected the idea of tolerating market manipulation. 

Subsequently, DWF Labs responded on X (previously Twitter), stating that the accusations were “unfounded and distort the facts.”

Binance has also released a response, without mentioning the employee’s dismissal. “We do not tolerate market abuse,” reads a post on X. 

“In the last three years, we have removed nearly 355,000 users with a transaction volume exceeding 2.5 trillion dollars for violations of our terms of use.”

Binance adds USDC to the Dual Investment platform

Binance has recently introduced USDC into its Dual Investment platform, offering users a wider range of investment opportunities. 

Thanks to this new addition, users can now use “Buy Low” and “Sell High” type products with a variety of USDC pairs, allowing them to earn rewards on the most popular cryptocurrencies.

The Binance Dual Investment allows users to set the price and settlement date to buy or sell cryptocurrencies in the future, without fees. 

This option offers flexibility and potential earnings to those who wish to invest in cryptocurrencies at a lower price or earn higher returns on their holdings.

Users who want to accumulate rewards on their cryptocurrencies or sell at higher prices in the future can take advantage of the “Sell High” option, which supports currencies like BTC, ETH, BNB, SOL, and many others.

For those looking to invest in stablecoins or buy cryptocurrencies at lower prices, the “Buy Low” option is based on USDC.

It is important to keep in mind that Dual Investment may suspend new registrations at any time and that the APR (annual percentage rate) may vary depending on market conditions. 

Binance recommends users to use the Dual Investment Beginner mode, which provides a detailed guide to the subscription process and a glossary of important terms.

Overall, the integration of USDC into Binance’s Dual Investment platform expands investment options, offering users greater opportunities to earn rewards on the most popular cryptocurrencies.