Binance has suspended an employee accused of using insider information from a prior role at BNB Chain to front-run a token launch. This action comes after an internal investigation began on March 23 following a complaint filed with the exchange’s internal audit team.
### The Investigation
The employee, who was part of the Binance Wallet team at the time of the alleged misconduct, should not have accessed confidential information about the project. However, the investigation found that before transferring to the department, the individual had worked in business development at BNB Chain. Leveraging insights from this previous position and familiarity with on-chain projects, the accused predicted a market reaction to an impending token generation event (TGE). Before the public launch announcement, they used multiple linked wallet addresses to acquire several tokens. They sold part of their holdings for profit while keeping the rest, which held considerable unrealized gains. “This behavior constitutes front-running based on non-public information obtained from a previous role and is a clear breach of company policy,” the Wallet team stated in an X post. Consequently, the employee was immediately suspended, and the company is collaborating with authorities to pursue legal action. It also confirmed that any related assets would be managed according to applicable laws.
### Community Suspicion and Rewards
Binance acknowledged the community’s role in uncovering the incident, stating that while it appreciated public efforts, rewards would only be provided to those who submitted information through its official whistleblowing email. A total of $100,000 will be equally distributed among four anonymous individuals who used the platform’s official reporting channel. Although the suspect’s identity has not been disclosed, multiple X users have speculated that Freddie Ng, a former operations manager at BNB Chain, could be involved. Reports noted that his LinkedIn profile shows he recently joined Binance Wallet’s business development team. Screenshots shared by X user “py” reveal that a wallet flagged by DEX Screener for profiting $82,400 from U DEX Platform (UUU) tokens had received coins from another wallet initially funded by the address “freddieng.bnb,” which Ng had previously shared on social media.
This case is reminiscent of other crypto scandals, like that of former Coinbase manager Ishan Wahi, who was convicted in 2023 for leaking token listing information, and the insider trading case of former OpenSea product head Nate Chastain, accused of using secret ETH burner wallets to buy NFTs before they were featured on the platform.
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