Binance reportedly booted a member of its market surveillance team who exposed evidence of market manipulation by DWF Labs, one of the global crypto exchange’s high-profile clients.
Rampant Market Manipulation By DWF Labs
The former staff member and his colleagues had been hired in 2022 to identify signs of market manipulation and other nefarious activities as part of Binance’s efforts to enhance its compliance procedures. According to a Wall Street Journal report, the team presented a report that basically uncovered that “VIP” clients — those trading over $100 million per month — were conducting prohibited activities like pump-and-dump schemes and wash trading.
The surveillance team claimed in late 2023 that DWF Labs manipulated the price of the YGG token and roughly six other tokens, WSJ reported, and processed over $300 million of wash trades that year — proposing the client be removed for violating Binance’s terms and conditions. DWF, a prolific investor in crypto-based projects, was purportedly making more than $4 billion in monthly trades on Binance.
Binance, however, said there was insufficient evidence of such activities after investigating the surveillance team. A week later, the company fired the head of the team, according to the newspaper.
Binance refuted the claims, noting that it rejected claims of allowing market manipulation and that the staffer was sacked after an investigation found the accusations against DWF were not “fully substantiated.”
“Binance emphatically rejects any assertion that its market surveillance program has permitted market manipulation on our platform,” a representative from the exchange posited.
DWF also denied the allegations of wash trading and market manipulation in 2023.
“It has come to our attention that a recent article contains many allegations that we believe to be unfounded and that do not accurately represent our ethical business practices,” DWF Labs stated in a statement through its Telegram channel.
Binance further stressed on X that they “do not tolerate market abuse”, adding that the exchange has on-boarded almost 355,000 users with a combined trading volume of $2.5 trillion for platform violations in the last three years.
