Recently, Binance announced its intention to list the OSMO token. However, 24 hours before the announcement, a wallet address bought over 2,029,846 OSMO. This has sparked the possibility of likely insider trading in the exchange.
Possible Case Of Insider Trading In Binance
Famous crypto journalist, Colin Wu, tweeted that a wallet bought OSMO tokens before the token’s Binance listing, buying about 2 million coins at $1.34 each. Wu alleged that this could be a likely case of insider trading.
The user bought the token on Thursday. Then, On Friday, Binance announced that it wanted to list the OSMO token on its exchange.
Usually, the price of any token soars after Binance lists it on its exchange. This rise is due to the increased demand by users for the token.
Therefore, it wasn’t surprising that OSMO’s price rallied after the exchange’s announcement. Holders of the token recorded a 25% gain following the listing.
Meanwhile, Osmosis Chian Explorer shows that the wallet address has a total value of about $5.3M. Its OSMO balance shows 1.7M coins worth about $2.7M at the time of writing.
However, Wu noted that Binance is currently investigating the incident. Hence, there might be further news in the coming days.
Insider Trading In The Crypto Industry
Insider trading is not entirely new in the crypto industry. For example, several top executives at crypto exchanges have allegedly been involved in insider trading.
After the report of the alleged scheme, OpenSea fired the executive. In July, the DoJ charged three persons, including a former employee at Coinbase, for insider trading.
Also, Changpeng Zhao, Binance CEO, earlier stated that Binance does not tolerate insider trading. The CEO asked users to send all suspicious cases of insider resignation to [email protected] for investigation.
Meanwhile, an earlier report by Argus (a P2P account and auditing platform) showed that about 46 cryptocurrency wallets bought certain digital currencies right before listing on popular exchanges. The two top exchanges on the list were Binance and Coinbase.
Replying to the report, Zhao said Binance usually takes steps to prevent insider trading. For example, it ensures that its project teams are unaware of possible insider trading.
However, there are speculations that the OSMO purchase could be a coincidence, not insider trading. Therefore, the crypto community only awaits the result of Binance’s investigation.
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