Key Points:

  • CZ claims to have frozen $2 million in addresses linked to insider trading during the Binance FXS token listing.

  • The action was taken immediately after the famous KOL Fatman revealed the incident.

  • Binance is calling for contributions from the community in an effort to combat potential leaks.

On March 28, crypto researcher FatMan tweeted that on-chain data revealed insider trading activities related to the Binance token listing process. CZ immediately responded by freezing $2 million of related accounts.

According to Fatman, on-chain data reveals the personal activities of an insider listing Binance’s FXS token. For several months, this anonymous individual led the pumping of many popular altcoins onto the Binance listing, placing a net profit of $1.4 million.

On-chain data reveals the covert operations of a Binance listings insider. Over the course of several months, this anonymous individual front-ran the infamous Binance listing pumps of multiple altcoins, booking a 7-figure profit. And he left a trail for us to follow… (1/9)

— FatMan (@FatManTerra) March 28, 2023

Wallet 0xd23 – a newly funded address with $53,000 and immediately started buying FXS on Uniswap. Trades are broken down into smaller batches to avoid slippage and detection. Small purchases continue for six days.

Source: Fatman

Three days after the anonymous last FXS purchase, luck came when Binance listed FXS, resulting in a massive price increase. The insider then sends all his FXS to an exchange, placing a good profit at the expense of fair market traders with no asymmetric information.

His second wallet also has some known transactions. In two days, our insider bought 131 ETH of TVK. 2 days later, TVK was listed on Binance and sold into the next pump, raising 277 ETH without touching a centralized exchange.

Source: Fatman

Apparently, this individual was aware of Binance’s plans to list FXS a few days in advance. In addition, this is one of the criminals simply because he does not cover his tracks.

After five years of this news, Binance CEO Changpeng Zhao (CZ) immediately responded and said to have frozen $2 million associated with the address mentioned before Fatman’s thread (and they never ask for reconfirmation).

Thank you for pointing this out. We had frozen $2m associated with the address in question before your thread (and they never asked to re-claim). We are also always fighting potential leaks, etc. We welcome you to point them out in the future too. Helps all of us.

— CZ Binance (@cz_binance) March 29, 2023

CZ’s straightforward and immediate action received much praise from the community. CZ also said that Binance always welcomes contributions from the community to fight against insider trading.

Yeah, great response. Most would try to sweep it under the rug.

— FatMan (@FatManTerra) March 29, 2023

Recently, Binance and CZ have been constantly in trouble from lawsuits by legal authorities. Most recently, the CFTC also filed a lawsuit against Binance and its CEO, alleging market manipulation.

Immediately after receiving the information, CZ responded, expressing disappointment that the CFTC did not listen during the exchange’s cooperation with this legal authority. Besides, Binance denied all allegations related to market manipulation and abetting US users.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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