Binance confirms guidelines for insider trading

Limit short-term insider trading

Binance, a major crypto asset (virtual currency) exchange, has already set guidelines for insider trading. It is a form of setting restrictions on short-term transactions of insiders.

He Yi, the co-founder of Binance, said that no employee of Binance, regardless of level, is allowed to conduct personal short-term cryptocurrency transactions, and must hold the position for more than 90 days before trading.

— Wu Blockchain (@WuBlockchain) January 10, 2023

Cryptocurrency journalist Wu Blockchain first reported on the 10th as follows.

Cointelegraph also contacted Binance in response, and a company spokesperson confirmed the rule. All employees said they were required to hold positions for 90 days on all trades.

Binance executives continue to be required to report all trading activity on a quarterly basis and have internal processes to hold accountable for such conduct.

#Binance had this rule from the very beginning. In the early days, it was 30 days. We changed it to 90 days about 2 years ago. https://t.co/2psa8oWwoy

— CZ Binance (@cz_binance) January 10, 2023

Binance CEO Changpong Zhao (CZ) also tweeted on the 11th confirming this. He also points out that Binance had such insider trading rules in place from the beginning.

“We used to have to hold positions for 30 days, but we changed it to 90 days two years ago,” CZ explained.

Investigation of insider trading

In May last year, Argus, a company that provides employee compliance services in the financial sector, pointed out possible insider trading on several cryptocurrency exchanges, including Binance.

Argus analyzed trading activity by looking at wallets that repeatedly bought a token before its listing announcement and sold it shortly after listing.

As a result, during the period from February 2021 to April 2022, profits of about 130 million yen or more for Coinbase, about 85 million yen or more for Binance, and about 13 million yen or more for FTX were generated from these insider transactions. claimed to be on the rise.

Binance’s CZ denied insider trading. “Binance has a strict policy and none of the wallets analyzed by Argus are associated with our employees,” he said. He replied that Coinbase and FTX also have compliance policies.

Relation: Suspicion of insider trading on virtual currency exchanges, major industry denies across the board

After that, FTX went bankrupt and it was revealed that it had been conducting sloppy management such as misappropriation of customer funds.

Binance is also striving to strengthen compliance by starting to disclose reserve assets and continuing to register licenses in various countries.

Relation: Binance CZ “The industry will continue to have difficult times in the coming months”

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