Yi He, the co-founder and Chief Marketing Officer at Binance, the world’s largest digital asset trading platform by market capitalization, took to social media platform X (formerly known as Twitter) to reveal that his firm is ready to pay $5 million to the person who reports insider trading at the exchange.
Insider trading at digital asset trading platforms is not a rare occurrence, and the case against Nathaniel Chastain, a former head of products at NFT marketplace OpenSea, is considered the first insider trading case linked to the digital asset sector.
Notably, Binance has also increased its compliance budget, raising its year-over-year spending on compliance from $158 million to $213 million.
Binance Confirms $5M Reward
In the post shared by Yi He on X on February 6, she discussed and addressed the concerns regarding the listing of the token RONIN, which dropped by 20% immediately after Binance welcomed the token.
Yi He recognized the issue of information leakage and announced internal adjustments, adding that she would implement stricter measures and consequences for the team members involved in the listing process and found leaking information.
Yi He said that Binance will implement internal adjustments that will enhance internal management and eradicate isolation within the currency listing group. Further, the leakage of any information surrounding the listing of the token will result in immediate termination and additional warnings.
She also confirmed that the exchange will improve external business communication processes, including project research and token models.
“If there is a leak, the listing will be canceled. If any information is leaked after the announcement, the pending listing will be extended directly, and the listing will be decided based on subsequent adjustments,” said Yi He.
Finally, the Binance co-founder added that the leading digital asset trading platform will improve its technical monitoring process to detect and address potential issues. The firm will monitor announcements and trading pairs, even though the content is encrypted, to provide a secure trading environment for the users.
“Because Binance wanted to isolate currency listing research and business in the past, it did not disclose contact information, which gave many opportunities for fraud,” she added.
Binance to Offer Rewards Worth $5M
Yi He also introduced a novel incentive initiative directed at fostering disclosures concerning token listings and possible malfeasance within the exchange. This move underscores the platform’s steadfast dedication to openness and ethical conduct, with significant rewards earmarked for substantiated disclosures.
While announcing the reward framework, Yi He stated that individuals presenting authenticated reports of malpractice surrounding Binance personnel stand to receive a bounty ranging from $10,000 to $5 million. The exchange promised anonymity to the whistleblowers.
Recently, Coinbase product manager Ishan Wahi and his brother Nikhil Wahi settled their case with the SEC revolving around insider trading at the crypto exchange.