Binance offers $5M reward for insider trading tip-offs

Crypto exchange Binance has announced that it will offer a $100,000 to $5 million reward for those who provide them with reports on potential insider trading or corruption within the exchange.

On March 16, Binance announced it would list the Solana-based memecoin Book of Meme (BOME). The token was paired with Bitcoin (BTC), Tether (USDT), First Digital USD (FDUSD) and the Turkish lira. In addition, Binance Futures said it will also list a USDS-M BOME perpetual contract with up to 50x leverage.

Ahead of the Binance listing, a crypto whale bought 314 million BOME tokens for $2.3 million on the Raydium decentralized exchange (DEX) at an average price of $0.0074. After the listing, the value of the tokens pumped to a high of $0.026, making the tokens worth around $8 million.

Book of Meme token price chart. Source: CoinGecko

After the listing, the trade was flagged, sparking community discussions, with some alleging that this was an insider trade. On Reddit, a community member asked if they thought it was a lucky trade or an insider tip, while another floated the idea that the trader could be an insider from Binance.

In a statement on X, Binance said it had launched an investigation into the insider trading allegations related to the listing of BOME on the exchange. Binance said that, during its preliminary investigation, the person at the center of the allegations had “no connection with Binance.”

Binance announcement on insider trading investigation. Source: Binance

Binance also urged the community to continue to report any potential insider trading or other misconduct related to the exchange.

The trading platform said it would provide a reward of $100,000 up to $5 million to those who send them relevant reports and promised to keep the sender’s identity a secret.

The exchange said that they would thoroughly investigate and make their findings public. Binance also said it wants to maintain a transparent trading environment and prevent any behavior that could affect market fairness.

While some had astronomical gains during the Solana memecoin frenzy, not everyone got lucky. On March 15, a trader who bought BOME very early fumbled a potential millions in gains after selling their tokens a day before the token’s price skyrocketed.

The trader sold 170 million tokens for $131 thousand before the token pumped further. At current market prices, the tokens would have been worth $2.3 million.

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