Conor Grogan, Director of Coinbase, has exposed a pattern of alleged front-running by leading cryptocurrency exchange Binance. In a series of tweets, Grogan shared evidence of connected wallets buying large sums of various cryptocurrencies, including Rari, ERN, and TORN, seconds before their listing on Binance and dumping them minutes later.
According to Grogan, these connected wallets purchased $900,000 worth of Rari seconds before its listing and sold it minutes after. Similarly, they bought approximately 78,000 ERN between June 17 and June 21 and sold them immediately after the listing announcement. The same pattern was observed with TORN.
Previously as reported by TronWeekly, a mysterious wallet address made a staggering profit of $55.4K in a matter of just 20 minutes by making a wise move of buying 6193.46 RPL tokens before Binance announced their listing and flipping them immediately after.
The individual or group behind the transaction managed to capitalize on the listing announcement and turn a quick profit. It is not the first instance of such a transaction. Grogan mentions a number of incidents like this in his Twitter thread.
These actions, known as front-running, are considered unethical and illegal in traditional financial markets. However, the lack of regulation in the cryptocurrency space has allowed such practices to continue unchecked.
Binance & A list Of Unethical Series
Grogan also pointed out that regulators and law enforcement have been cracking down hard recently on CEX insider trading. If front-running is taking place, it may be the result of insider MNPI, most likely from a rogue employee associated with the listings team who would be aware of future asset announcements or a trader who discovered an API or staging/test trading exchange leak.
In addition, Grogan also shared another suspicious transaction involving the purchase of $500K+ worth of RAMP over a few days and sent it to Binance minutes after the listing announcement; assuming they sold it, it was a ~100K payday.
He also highlighted that Binance could probably easily trace the person via deposit address and shared a 6th suspicious transaction he found.
This news has sent shockwaves through the crypto community, raising questions about the integrity of Binance and calling for stricter regulations to prevent such practices.
The revelation also brings up the fact that directly connected wallets are still up to the same thing months later. This developing story will surely have wave effects throughout the industry, and it remains to be seen how it will play out.