Binance employee accuses DWF Labs of market manipulation
Binance’sĀ investigative team alleges it discovered that market maker DWF Labs was involved in market manipulation.
The Wall Street Journal (WSJ) reported thatĀ DWFĀ Labs’ allegedĀ fictitious trading was discoveredĀ during an internal investigation using proprietary software tools. WhenĀ the discovery was presentedĀ to the DWF Labs’ management, the exchange fired the head of the supervisory service.
After the U.S. SEC filed a lawsuit against Binance and its founder, Changpeng Zhao, in 2023, the exchange promised to strive to build a secure and reliable platform continuously.Ā To do this, the company hired investigators from the traditional financial sector.
During the study, the group identifiedĀ VIP clientsĀ involved in market manipulation. The report stated thatĀ top tradersĀ accounted for two-thirds of the total trading volume on the platform.
Additionally, Binance noticed that accounts wereĀ tradingĀ certainĀ cryptocurrencies.Ā According to former company insiders, no response was received when DWF Labs was asked who controlled the addresses.
The report notes that in 2022, DWF Labs invited potential clients to useĀ an active trading position to increase token prices and create artificial volume on exchanges.Ā WSJ also added that the market maker confirmedĀ that it had created an artificial trading volume for one of its clients.
DWF Labs called the accusations unfounded and that it distorted facts.
Binance, in a commentary on the article, stated that it strictly adheres to market supervision and prevents abuse. According to statistics, over three years, the exchange disconnected about 355,000 users with a transaction volume of more than $2.5 trillion for violating the terms of use.
In April 2023, the market makerĀ was suspectedĀ of dumping tokens of its portfolio projects worth at least $65 million. Projects included raising funds for an ICO for a project thatĀ was never launched, unprofitable management of the investment portfolio, and the company’s connection with OneCoin. OneCoin’s cryptocurrency pyramid scheme bilked users out of $4.4 billion.
