The case involves a member of the Binance Wallet team who allegedly used confidential information from his previous role at BNB Chain to profit from a new cryptocurrency launch.
The employee reportedly purchased a significant amount of the token before its official token generation event and sold part of the holdings for a profit.
Employee accused of front-running
On Tuesday, Binance acknowledged that the staff member had exploited information obtained from business development work. The Wallet team maintains no technical knowledge about specific projects, but the employee took the information to predict the timing of the TGE before its actual launch.
The employee carried out a forbidden action known as front-running while working at Binance. According to the company statement, the violation was very serious which led to immediate suspension of the employee. Binance emphasized that the act was unrelated to the official duties of the Wallet team since the team operates independently from project management responsibilities.
Memecoin speculation and market impact
While Binance did not name the token involved, the crypto community believes the project in question is the UUU memecoin from the Binance Smart Chain ecosystem. Speculation began after a user named “pycharts” shared a screenshot allegedly linking the employee’s wallet address to large transactions of UUU tokens. On March 23, the wallet sold over 6 million UUU tokens, coinciding with a sharp decline in the token’s price.
The situation drew further attention when social media users connected the wallet address to Freddie Ng, who was identified as a member of the Binance Wallet team and part of the business development and growth department. Binance responded quickly, stating that an internal investigation was underway. The company also committed to sharing the results of the inquiry once completed and offered up to $100,000 in rewards for whistleblowers who help expose such violations.
Australian police warn of Binance impersonation scam
Binance struggles with additional problems since the Australian Federal Police warned about scammers conducting an active impersonation scheme. The authorities have documented 130 reported victims at this time. Binance users receive scam messages through fake notification alerts that claim their accounts have become vulnerable to attack. The messages falsely require users to make new wallets while secretly guiding assets to scam-controlled accounts controlled by thieves. Cryptocurrency users should exercise caution in every communication while verifying its authenticity according to the Australian Federal Police guidance.