An unknown crypto trader made over $100,000 in profit after buying the token just minutes before it was listed on the dominant crypto exchange Binance, according to analysis by on-chain sleuths Look on the chain.
The trader purchased $208,335 worth of Gains Network (GNS) tokens just 30 minutes before Binance listed the token on its global exchange. GNS jumped about 51% after listing—from $7.92 to $12.01. Traders then untie their GNS positions, raking in 6,747 profit in less than an hour.
Lookonchain refers to incredibly timed trades, perhaps cheekily, “smart money.” However, if recent trends show anything, intelligence probably has nothing to do with it.
In the past year, several leading crypto exchanges have been under close scrutiny for alleged—and in some cases, confirmed—examples of walking ahead: the practice of traders, armed with insider information, shoring up large positions of all-but-certain tokens. increased in value, and in this case, by a coveted listing on a centralized crypto exchange.
Earlier this month, Ishan Wahi, former product manager for Coinbase, plead guilty to participate in an insider trading scheme that netted him $1.1 million in profits. The case was described by federal prosecutors as the first insider trading case involving cryptocurrencies.
When the allegations were first announced against Wahi in July, Binance CEO Changpeng Zhao condemned the actions of the Coinbase employee.
“Crypto or not, regulated or not, insider trading and front running should be criminal offenses in any country,” said Zhao.
But Binance itself may not be immune to such practices.
Late last month, Conor Grogan, head of product at Coinbase, suspected cases in the last year and a half affiliate wallets have consistently raked in tokens moments before listing on Binance, and made millions in profits in the process. Identified in the allegations, and stories linked by Wall Street Journalis the same wallet address that benefits from GNS listings today.
In other words, whoever is executing questionable time trades today is doing so with their wallet already in public, which goes to show the reality of how hard it is to stop such exploits, if they are actually based on insider knowledge.
Binance claims that it is institutionalized self-governing policies prevent employees from trading in short time. But Coinbase’s Wahi, for example, passes insider information about its soon-to-be-listed token to its relatives and friends — a practice that isn’t technically prohibited by Binance’s internal policies.
Binance did not respond Decryptionrequest for comment on this issue.
Unlike Coinbase, which is headquartered in the United States, many crypto exchanges including Binance conduct a large part of their global business outside the jurisdiction of American regulators.
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