Leading crypto exchange Binance and DWF Labs react to a recent report by top media outlet Wall Street Journal (WSJ), affirming zero tolerance for market abuse.
For context, the WSJ report revolves around allegations of wash trading and market manipulation involving some of Binance’s “VIP clients” who boast monthly volume worth $100 million.
WSJ, citing sources familiar with the matter, claimed that Binance relies on these VIP customers, who account for two-thirds of the exchange’s trading volume.
To explain further, WSJ recounted how Binance established a surveillance team in 2022 to uncover nefarious activities, including market manipulation, within the exchange.
During the investigation, the team recommended that the exchange remove hundreds of users, including prolific crypto firm DWF Labs. Per WSJ’s claims, in 2023, the team revealed that DWF not only manipulated the prices of various tokens, like Yield Guild Game (YGG), but it also processed $300 million in wash trading on Binance.
WSJ claimed that Binance did not act on the report but sacked the surveillance team head a week later. Binance’s compliance unit reportedly fired the head of the surveillance team due to speculations that he was working with DWF’s competitors.
Binance Reacts, Affirms Zero Tolerance for Market Abuse
Expectedly, Binance reacted to these allegations in an X post published in the hours leading up to press time. In the post, Binance confirmed that it runs a strict market surveillance program and provided insight into the measures taken over the years to eradicate market abuse on its platform.
To emphasize its zero tolerance for market abuse, Binance said it removed nearly 355,000 users for violating its terms. These users, who account for $2.5 trillion in trading volume, were offboarded from the exchange over the past three years.
Despite acknowledging the fierce competition in market making, Binance noted that its compliance team usually conducts an unbiased analysis of relevant evidence.
In the meantime, Binance emphasized its commitment to fostering fair competition within the industry and steadfastly protecting its users from market manipulation.
In response to WSJ, we affirm our strict market surveillance program. We do not tolerate market abuse.
Over the last three years, we have offboarded nearly 355,000 users with a transaction volume of more than $2.5 trillion for violating our terms of use.
Market maker…
— Binance (@binance) May 9, 2024
DWF Labs Responds
Similarly, DWF Labs also reacted to the report, characterizing it as unfounded and fact distortion. The company affirmed that it conducts its operations with the highest transparency, integrity, and ethics standards.
To our valued partners: We want to clarify that many recent allegations reported in the press are unfounded and distort the facts.
DWF Labs operates with the highest standards of integrity, transparency, and ethics, and we remain committed to supporting you and our over 700… pic.twitter.com/aydp1hoham
— DWF Labs (@DWFLabs) May 9, 2024
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