9 months ago
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Binance is launching a bounty program offering up to $5 million for verified information that could help expose corruption among its rank-and-file personnel. The exchange’s decision to launch this was made in response to allegations of insider trading, specifically with its process for new token listings.
The Ronin token (RON) was listed on Binance on February 5, with the token experiencing a surge of over 30% a week prior to the listing announcement. However, within just an hour of Binance’s listing, RON fell by roughly 18%, ending with a 26% decline within the day.
This rapid price movement fueled speculation about leaks, ostensibly enabling traders to front-run the listing. Binance co-founder Yi He said that the exchange found out that some users discovered blockchain data, which indicated that Binance was preparing to list the token.
Despite the controversy, Binance aims to overhaul its current listing process to restore trust. New measures include stricter internal communications controls and a more stringent process for monitoring team members involved in listings. Employees leaking information about upcoming token listings will receive a warning for a first offense, with repeat offenders terminated.
The bounty program offers payments from $10,000 to $5 million for verified tips exposing corruption related to token listings and other related areas. Projects found hiring terminated Binance employees will face permanent blacklisting. Binance is also tightening external communications around listings and will cancel any listings where information is leaked prematurely.
While emphasizing its encrypted listing announcements, Binance acknowledges the potential for leaks, enabling scripts to trade automatically based on listing news. Improved technical monitoring aims to address this issue.
The controversy follows accusations in January 2023 of possible trading bots exploiting leaks to profit from token listings on Binance. Coinbase director Conor Grogan cited several wallets displaying a pattern of buying tokens right before listing announcements and dumping once the tokens are listed.
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