Argus (a company that assists firms to organize employee trading) discloses that many crypto investors are taking advantage of the inside information regarding the expected time of gaining and losing tokens, as per a report published in the Wall Street Journal. The report – dealing with the existing public data, indicates that many wallets present a pattern of purchasing tokens days ahead of the selling and even listing thereof.
Growing insider trading across the crypto sector
The respective trend seems to be widespread throughout the big crypto exchanges taking into account FTX, Coinbase, and Binance. The listing of a token by the top exchanges normally works as a short-term catalyst for the prices of the token. As per the blockchain-based data, in August, $360,000 worth of Gnosis tokens was accumulated in a wallet just in 6 days. Binance declared that the exchange would list the token on the 7th day, causing it to mount its price to over seven times as compared with the average thereof in the previous week.
The trading of the wallet began four minutes following the declaration by Binance to list as well as liquidate everything just in 24 hours. From the very trading, up to $500,000 was earned by them, with $140,000 as a profit. The analysis brings it to the front that this thing has not been done by the wallet for the first time. Argus found out that $17.3M in crypto was purchased by 46 wallets right before their listing on the 3 top exchanges. Nonetheless, the owners are still anonymous
Even though the displayed gains from the trading of the coins were up to $1.7M, the overall profits are seemingly higher. According to the report by the company, several wallets shifted their stakes’ specific proportion to exchanges rather than trading straightly. The analysis aimed at the time from 2021’s February to 2022’s April. Observers and regulators have been outspoken about the harm caused by this practice to retail investors.
FTX, Binance issue statement
Nevertheless, the claims have been refuted by the exchanges listed in the analysis. They affirm that their policies restrict employees from having privileged information to perform trading. Both Binance, as well as FTX, additionally asserted to have gone through the analysis and did not infringe the policies thereof, as the CEOs Changpeng Zhao and Sam Bank main-Fried confirmed.